The exact model of the Acer would be nice to know. There are dozens and most have a recovery option that either returns the laptop to it's original state, or you make a recovery cd of your own at any point or time.
What does your neighbor say that he/she did? Also the neighbor may help troubleshoot the problem with the laptop in front of him/her.
If a plain jane Windows XP disk was used, did he/she install the drivers for the system? Also, what service pack was installed? Your MP3 player needs Service Pack 2.
If it was the recovery disk for the laptop, then you can look in another direction.
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"I love it when a plan comes together." - Hannibal Smith