step 1:
Control Panel => Regional and Language Setting => Languages => Supplemental Languages support
click "Install files for East Asian Languages"
(if you did not do it before it requires XP installation Disc)

step 2:
Control Panel => Regional and Language Setting => Advanced => choose Chinese (PRC) (if you want to play some games in tranditional Chinese you need to set it as Chinese (TaiWan))
(require reboot)