Found this here:
http://www.computing.net/windowsme/wwwboard/forum/30734.html
"No need to format HD - drastic step...
my guess is that you have IE6 and or WMP9 beta installed.
To reinstall Win ME it will be necessary to downgrade IE6 to 5.5 and to remove WMP9.
Unfortunately WMP9 is not readily uninstallable and once you have unsuccessfully tried WinME reinstallation the Sytem Restore method is no longer available.
Download WMP7.1 from Microsoft and store it in a new folder.
I removed WMP9 by deleting the whole Windows Media Player folder and renaming C:\windows\system\wmploc.dll to wmploc.old.
You may need to use safe mode for renaming and deleting (I didn't).
Install WMP7.1 and then reinstall Win ME.
Worked for me.
Acknowledgements to Jonathan, Noel Ron and others on
http://search.communities.microsoft.com/newsgroups/ which was where I went after not finding the answer in this forum.
Good luck."
More...
"when i tried to reinstall widnows i also recieved a stoppage at 65% I and got the erro 'SUWIN GENERAL PROTECTION FAULT IN MODULE VERX.DLL AT 0002:24AE
i fixed this problem by deleting windows media player and wmploc.dll , i then moved internet explorer folder from C:\windows\programs to recycle bin,, i wasnt able to uninstall IE6 so i moved it,, and low and behold i was able to reinstall windows me, then i just moved the IE6 back from the recycle bin and everything works fine now"