Kai's Power Tools, the plug-in package for Photoshop was the first Kai's filter package (released in the early 1990s by HSC). Successive versions of Kai's Power Tools have been released since then when the Kai products changed hands from HSC to MetaTools, MetaCreations (the merger between Fractal Design) and then ultimately with Corel after MetaCreations went bust.
Kai's Vector Effects was a completely separate product from Kai's Power Tools. It was originally a Mac-only product compatible with Illustrator 5, 5.5 and 6, as well as Freehand 5 and 5.5. When the product became Windows compatible (with Corel taking over the distribution of the product) it worked with versions 8 and above of Adobe Illustrator. I'm not sure about this, but I don't think Vector Effects 1.5 will work with IllustratorCS2. There's lots of Illustrator plug ins that have to be re-compiled to be compatible with AI CS2. That includes products like CAD Tools.
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On the subject of fonts, and how some may not work with newer versions of the MacOS and WindowsXP, investing in a good font creation tool like FontLab, or FontLab's upcoming upgrade of Fontographer might help.
I've had wierd fonts not want to install within WindowsXP and it would usually be some mistake in font naming that made the font "invalid." My copy of Fontographer 4.1.5 has to run on an old WinME machine (it won't run on any XP Pro machine with more than 512MB of RAM). But it has come in handy for making previously useless fonts useful once again. I would just open the font outlines file of a Postscript font and then try to import the metrics file. Generate a new font and make sure the file naming and font styles are saved correctly.
FWIW, I've never had any problems like that with any of my Adobe fonts. I have the Akzidenz Grotesk BE family (it came with Adobe Illustrator 4). Those PS fonts work fine in XP Pro.