The method I used in my installer is to check this registry value:
HKLM
SoftwareMicrosoftMediaPlayerPlayerUpgrade
PlayerVersion
The PlayerVersion value will be set to a string like "10,0,0,0". (Note that commas, not periods, are used to separate the numbers.) You need to extract the first number (the major version) and make sure that it is 10 or higher.
I couldn't find any official documentation about how to detect WMP, but the above method seems to work properly with the current versions of Windows and WMP.
Note that if WMP9 (the version that ships with Windows XP) is installed, your application will not crash when you try to use a MediaElement, but the control won't render anything, and warning messages will be printed to the debugger.
If your application will only be used with Vista or higher, you don't need to worry about any of this, because Vista comes with WMP10.
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