Story Mode?
When you installed the game, did it ask you if you wanted to install DirectX? If so did you say yes?
If that's not it (you've got DirectX 9 installed), then it's most likely your graphics card. To find out your graphics card and DirectX version in XP you can click the start button, then click on "Run...", then type in "dxdiag" and press enter. It shows the DirectX version on the main screen and the name of the graphics processor on the display page. Post back the results of that
well i did the test direct3d thing and i hit cancel till it said direct3d 9 and i hit ok and the cube spun perfectly in 3d with the logos. it says DirectX Version: DirectX 9.0c (4.09.0000.0904) so it should run perfectly but it story mode crashes every time telling me it cant run DX9. maybe its something that has to do with 3D API? whats that though?
EDIT: btw its only story mode that crashes as soon as i click my profile, not freestyle or puzzle, they work fine
If you haven't already, I would suggest updating your video card drivers and reinstalling DirectX, just in case either has some old files.
Radeon drivers can be found at http://ati.amd.com/support/driver.HTML
The DirectX updater is on the LR2 disc.
Great!, I know how to get to the Directx thing but I have know idea what to do on it to make it work. I also do not know how to update snd reinstall it. Please help me, I thought I did something wrong while installing it so I uninstalled it and reset it again. When I installed it a second time I tried it and it still did not work, and all my tracks on feestyle were deleted. So now I am asking you to help. I feel so bad I can't even play it until story mode works. I HOPE THIS WORKS. 
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Whenever i click on it it says "Direct3D9 Could not be launched." then i hit ok and it says "3D API Could not be launced." then shuts donw. whats wrong?