Yes, Knots is fully installed if you see the menu items. It's just a self-extracting rar package and doesn't create uninstall entry to control panel, but removing it is easy, just delete the Knots folder and the Knots 2 menu item folder and it leaves nothing to the machine.

So you didn't have any luck? Did you try without a firewall? It looks like VLC starts ok, but Knots can't access it through telnet at localhost:4212. Almost all similar problems have been caused by firewall even when people think they are not on so that's why I have to always ask. Some virus scanners act as firewalls too and I really can't help with those. Knots should work on XP/VIsta/7 32/64-bit if nothing is blocking it.