I guess I should try that again.
Windows 7 comes with most of the video codecs you need. Maybe you need something for audio, I don't know--but video, it's got it built in. You just need a player and a splitter (or whatever it's called) to use the modern container formats (like mkv, vob, avi, etc.).
At least, I think that's how it works. Anyway, there's guides online to using the microsoft codec with third-party players/audio/container stuff.