0. Make sure you downloaded latest version of VE from this site
http://www.thedeemon.com/VideoEnhancer/VideoEnhancerSetup.exeand not from third party archive where viruses potentially may be found.
1. In WinXP no application can cause blue screen unless you have some hardware or driver issues. Please make hardware tests, especially for your RAM and video card. Video Enhancer does not contain any drivers and doesn't work on such a low level.
2. I suppose you've changed some other options (like codecs etc.), because just switching between two SR modes impacts only processing speed in terms of user experience.
Please try running Preview first. If it works OK, but Start doesn't, then it's a codec issue and you should tweak/change a codec.