I just did this a couple days ago. I installed XAMPP, started the XAMPP control panel to make sure Apache and MySQL was running, then I created a "forum" folder under XAMPP/htdocs (which is optional, you can install it in htdocs if you want). I then followed the vbulletin install instructions except of course when it talks about "uploading" I just copied the files to XAMPP/htdocs/forum.
So there isn't much in the way of special instructions. I think if you work out the issue you're having with editing the vb files you'll probably find it'll work.
Thanks! I found out it may be the PHP version I have (which is the current one) that conflicts with the older VB versions. Either I upgrade VB or downgrade my PHP version.