NJStar is what i use anyway.. Its shareware but still useable after it runs out. first 90 days you get the use of a popup dictionary which is handy.
i have the IME installed, but everytime i run it it crashes my MSN and freezes my left hand desktop (2 screens.. my right hand screen isnt affected. odd) it even managed to wipe out my desktop of all functions last week and i had to system restore
When it asks you for the CD, I believe you can just point the dialog to the 'C:\Windows' directory or some directory in that folder. This is how I got it to work on my bros computer.
You could try installing another OS, or rownroading ehem as well. I heard that Ubuntu can install on top a windows installation without any need for partitioning and things of that nature.
JWPce should allow you to edit Japanese text. It's what I used back in the old days when you couldn't just use the Japanese IME on non-Japanese editions of Windows (well actually I used JWP, JWPce was originally meant for Windows CE and only became the main version later).
you need to change your language to Japanese as the priority and restart the computer (for xp). This will give you access to the ime, unless you have not installed the language packs. There is an alternative program for the ime, you can search for it, but I would advise against using it because it is very buggy.