Did you try the following?
1. Hold the shift key to prevent the auto launch?
2. Disable AIN as well as AUTOPLAY?
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I just reinstalled XP Home and downloaded all MS updates, including WMP 11. I used Tweakui to disable autoplay for the CD drive and also instructed XP to "Take no action" for all options in the properties dialog box for this drive. This works fine as long as WMP is NOT open. I can insert a music CD in the drive and nothing happens, which is what I want. However, if WMP IS OPEN, it plays the CD when it inserted into the CD drive. I unselected all options making WMP the default player for all devices and files types, but could not prevent WMP from playing a newly inserted CD.
To summarize, is there a way to prevent autoplay WHEN WMP IS OPEN? Is there any hope, or am I stuck with this bahavior?