This is not the first time I am installing Apache, PHP and MySQL db on my local machine, but this time it seems I cannot solve the problem mentioned in the title.
Apache installation went fine. PHP installation went fine as well. Same is with MySQL.
But the problem is with mcrypt library.
PHP is located under C:\PHP where php.ini is as well.
I added C:\PHP to system PATH and all other extensions work fine:
Other relevant info from php.ini:
extension_dir = "C:\PHP\ext"
I DO have libmcrypt.dll in C:\PHP and php_mcrypt.dll in ext dir.
I even tried to put dll in the system32 dir as suggested somewhere, but that didn't work as well.