I dont WMP because i will be installing a newer one later on. But the Option is greyed out as enabled? Any ideas on how to remove it? Perhaps one of my addons (some codecs i guess) i have now requires it and nLite is smart and greyed it out?

OR is it that I built one image with nLite already and this second build I am pointing to the same WIN source (HDD) that has been changed by nLite already? Because my Hotfix (RyanVM's) add-on is missing from the list?

It would be nice to have that extra storage space on my CD! Anyone know why i cant choose that Option?

The word "compability" means that in order for something else to work, you also need that component.

I am pointing to the same WIN source (HDD) that has been changed by nLite already

I you work on a modified source, some option might be disabled because some components are missing or altered. Now, there is a small bug in nLite (sorry for the word), I think... when an option is not available, it's greyed out but shows the default value as greyed out, not the real value.

As for compatibility, I think you ned to keep the compatibility (not the player obviously) if you want to be able to insall WMP later.