|I've discovered a flaw (and subsequent fix) installing VLC Media Player 2.0.0 under Windows XP.|
For an odd reason, it installs with the default video output as "default". This results in the following garbled image, see my screenshot:
The fix for this is to go into Tools > Preferences > Video and change the Output setting (first pulldown menu) from "default" to "Direct X (DirectDraw) video output":
I'm not sure why the VideoLAN team did this but it's likely they are unaware of this error.
I've installed this and duplicated the error multiple times on different computers, by following the above instructions you will be able to successfully use VLC Media Player 2.0.0.