We've heard a few other reports about problems with Install & Play.
Install & Play is working fine for most people. So it's not a widespread issue.
Is your version of Windows 32bit?
Nadeo recently upgraded ManiaPlanet to 64bit. There's also a 32bit executable that is used if your PC can't handle the normal 64bit version of ManiaPlanet.
I'm not sure if it's related or not, but it seems like it might be.