I don't have XP but one thing to check is you've got all the files the prog needs in the right place, I've just checked on my HD:
Dir2boot (dir)
\Dir2dj.exe
\Dir2nero.exe
\Source(dir)\Dir2DJ.bas
\Source\dir2nero.bas
\Tools(dir)\bin2boot.exe
\Tools\cdi2nero.exe
\Tools\cygwin1.dll
\Tools\iplogo.mr
\Tools\mkisofs.exe
The image will be created within the 'Dir2boot' directory if all is ok.
The only errors I've ever had with Dir2boot is when the ip.bin is 'read only' - that's just a case of changing the properties of that file.
Hope that helps.
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