Well, you could always buy computer games from eBay. There's a lot of XP-compatible software for sale on there, and most of those games don't require an Internet connection, just the DVD / CD to always be in the drive. That is, of course, unless you make ISO copies of the CD's / DVD's and use Daemon Tools to create a virtual DVD drive and then have the images mounted via Daemon Tools so that, to the program's CD checker, it appears that a real disc is in a real disc drive so you don't need to actually have the CD ever-present and spinning in the drive.

As far as Internet connectivity, I'm guessing you can't just run a CAT-5 Ethernet cable to your machine?

With regards to video playback, have you considered using SMPlayer or VLC? VLC is easy to set up and has a friendly interface, but SMPlayer has better performance. Either way, even their newest versions are, last I checked, compatible with XP, but if they are not, let me know and I'll find older releases that are. Make sure that frame-dropping is enabled and you should have really good video playback with them. Either VLC or SMPlayer should give better playback than Media Player Classic with the CCCP.