microsoft register server stopped working

This may usually happen due to data execution prevention.

Try adding it in the exception for data execution prevention and check if it works.

Step 1: Go to Start, Control Panel and click on System.

Step 2: Now click on the Advanced tab and under Performance, click on Settings.

Step 3: Click on Data Execution Prevention and select the Turn on DEP for all programs and services except for those I select: radio button.

Step 4: Now click the Add button and browse to C:\Windows\System32 and choose the regsvr32.exefile. When you get the message stating it could make your computer become unprotected and vulnerable to attacks, just click OK to continue.

Step 5: Click OK and then click OK again to exit.

Now check if you still receive the error message.

For the setting.ini pop up message issue you try the below step and check if it helps.
There is a possibility that some third party program installed on the computer is conflicting with the windows sidebar.

I would suggest that you perform clean boot procedure and check if it works.
To help troubleshoot error messages and other issues, you can start Windows Vista by using a minimal set of drivers and startup programs. This kind of startup is known as a "clean boot." A clean boot helps eliminate software conflicts.

Refer the below link to know more about clean boot procedure.
How to troubleshoot a problem by performing a clean boot in Windows Vista or in Windows 7
http://support.microsoft.com/kb/929135

Reset the computer to start as usual
After you have finished troubleshooting, follow these steps to reset the computer to start as usual:

• Click Start, type msconfig in the Start Search box, and then press ENTER.
• If you are prompted for an administrator password or for confirmation, type your password, or clickContinue.
• On the General tab, click the Normal Startup option, and then click OK.
• When you are prompted to restart the computer, click Restart.

If you still receive the sidebar error even in clean boot state then the setting.ini file is corrupted, you will need to rename it and check if it works.

You may need to remove or reinstall them from the Gadget Gallery after you have performed the following troubleshooting:

• Copy and paste the following text into your Start Search field exactly as it is below and press Enter %homepath%\AppData\Local\Microsoft\Windows Sidebar

• You will only see two items a Gadgets folder, and Settings file.
• Close Windows Sidebar if it is open – or you will not be able to complete the next step.
• Right-click the Settings  file, select Rename, and change the file name to Settings.old
• Now open Windows Sidebar, and everything should be set to defaults.
• You can now add your gadgets, and customize the sidebar to your preference.