Here's a few things you can try...
1. Install the VC++ Redists (the error points to this):
http://www.microsoft.com/download/en...s.aspx?id=5582
2. Install .NET Framework 3.5 SP1:
http://ninite.com/dotnet/
3. Update your XP to SP3 and perform all windows updates. (If you haven't already)
4. Try running it in a compatibility mode.
5. Make sure you have all (or at least your video) drivers installed.
6. Try giving Graal6 a different name.