I am replying to this myself in the hope that anyone else who has this problem take notice.
Do not go off on a wild goose chase changing settings and / or creating spfiles, control files etc
Ensure that you are installing the download logged on under a windows user account with administrator privileges - It was the cause of all my problems.
I had reinstalled XP Pro ( 32 bit ) and didnt bother to create a user account and tried to install 11g XE and came across all these issues.
I did an uninstall, created a windows user account with admin privilege, rebooted and reinstalled the download sucessfully.