Hi,
I too have windows XP SP2 and things are working fine after i configured windows for indic language.
You need to add the support for east asian scripts and it works well.
After confuguring, if still aksharmala does not work, close aksharmala, close MS word. Restart word then aksharmala and things should work well.
By default, aksharmala does not install all the languages. So you need to install keymaps of you language of choice.
Please refer to this article.
also find the attached files, which will solve the problems
i have converted pramukh IME help files and converted them to pdf.
These explain windows setting which are needed to be configured in order to use any indic transliteration software.
Hope this helps.
Sujal
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Thanks and Regards
Sujal Upadhyay
"To disconnect from the self and to become Aware of anything else is nothing but unhappiness" - Bhagawan Ramana Maharshi