While I have IE 7 installed on all my XP PCs, I definitely unregistered VGX.dll on my W/2000 home PC. After a few days of testing all is well (i.e., as the VGX.dll never became a widely used standard). In addition to AV protection and safe browsing practices, I'd also recommend unregistering the dll just in case a VML exploit might be present at a website you might visit.
Instructions can be found in the link below,
http://www.microsoft.com/technet/security/advisory/925568.mspx
You may need to expand these sections: General Information >>> Suggested Actions >>> Workarounds
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To un-register Vgx.dll, follow these steps:
1. Click Start
2. Click Run
3. cut/paste this string
regsvr32 -u "%ProgramFiles%\Common Files\Microsoft Shared\VGX\vgx.dll"
4. Click OK.
5. A dialog box appears to confirm that the un-registration process has succeeded.
6. Click OK to close the dialog box.
7. Impact of Workaround: Applications that render VML will no longer do so once Vgx.dll has been unregistered (as shared earlier this should be rare)
8. To undo this change, re-register Vgx.dll by following steps 1-7 above -- except cut/paste the following string for step 2:
regsvr32 "%ProgramFiles%\Common Files\Microsoft Shared\VGX\vgx.dll” |