Well, I just burned an XDFS formatted CD-RW.
The version of MXM I ran was my 0.9f "Work-in-progress" - but the ONLY change was I moved the default font from the media directory into the executable.
I ran it by loading it while sitting in the latest Evo-X dashboard (auto-run game option set to on, IGR set to on).
MXM loaded fine, application loaded fine, IGR worked within loaded game.
So, Evo-X IGR is not the problem (and, AFAIK, X2 IGR is not either).
I plan on making the next release bulletproof enough that, even if there are NO config files, it will **still** load something up (might be a bit ugly) and run.
Now, as a test, I copied over the latest release, 0.9e, to my work directory (with no Media directory in it) and I get my sky and logo, then it reboots (presumably when it tries to load the non-existant default font). So there was no lock up, and it got as far as the logo.
With No MXM.xml, I get the same results.
Finally, replacing the Media directory (with the Font16.xpr) but still missing the MXM.xml, it booted up fine.
In short, I have not been able to recreate your problem. As far as I know, you should ALWAYS be able to get to the sky and logo screen, no matter what.