First, install the updated Windows Update software, next install the Japanese Language Pack. Skip all other updates until Japanese is installed.
Go into Keyboards and Languages and change the display language to Japanese.
Finally, you should change the system locale to Japanese. Until you do that, install dialogs for Japanese software will not be readable. (This screen shot added from Windows 7 so doesn't really match others. To get to this dialog: Control Panel > Clock, Language, Region > Region And Language > Administrative)
This is an install screen from the Yahoo Japan toolbar. Note that if you haven't changed the locale, you will only see "mojibake" here.
View of Yahoo Japan widget application.
Here is what the start menu looks like in Japanese.
