I have 2 users on my XP machine, and when I try to install something into a new directory, it says i don't have privelages. After i create the directory on my own, it tells me that i don't have the privelage to install the program. Every time i sign-in on msn, it tells me there's a new version available for download, but i must log in as a system administrator. The problem is that both users are system administrators.

Why would you need 2 administrator accounts? Change one of the accounts into a guestaccount and try again (controlpanel > useraccounts - you can always switch accounttypes if need be). If that doesn't work you can download what you want to install and install it from safemode on the account called "administrator".