Thanks for all the help. I checked my video driver, and it was the same as when I bought the computer in 2001. I did a little searching, and even though I found out Intel no longer supports what I have, they did still have the very last driver update for my devide (from 2002). I installed that, and then went back to the VLC player and it appears everything is fine now.
My advice to anyone who wants to disable the the transparent text is to turn off the settiing for overlays - you have to check the "advanced" box to see that option. Then, if things go purple, try to update your device driver. It worked for me. I am somewhat surprised I couldn't easily find this information in some sort of "newbie FAQ", but maybe anyone looking for a solution will see this thread. Most of the time I spent in frustration was because I knew nothing of overlays before. I wish a search through the forums or the internet would have pointed me to "overlays". If I had seen a bit of information that said "if you want to disable the transparent text effect, uncheck the overlays options", I might have been able to go from there. I learned a lot though.
My eternal thanks to the kind folks who read these questiosn and give us answers, it is highly appreciated. Now I need to go watch some videos