First of all I don't really care because I am running game in browser just fine. Anyhow in Windows XP when trying to launch STEAM version I get such "fresteamworks.dll" error:
A quick google for GRABMI_FILTER_PRIVACY has two results of solved errors that look like yours: 1. Incorrect CPU drivers (or more likely motherboard). So try updating your device drivers. 2. GUI Skinning issue. So uninstall anything you don't need or use in appwiz.cpl.
If you remove that file, you likely won't have access to any of the Steam features (e.g. Steam based login, achievements, Steam wallet, etc). I'm not surprised that it doesn't function properly under XP though.