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[cravavr3]

1.06 does not include the .dll you mention that was a patch for flashing bios while inside xbox and powered where it did not disconnect properly.

If the software loadproper on w2k system, something is fishy with the winxp, do you have administrator rights?  BTW it does not matter what SP you use.

Have you tried booting in safemode and removing all USB drivers then restarting and load the xchip software drivers?  SAFEMODE removal allows removing GHOST USB devices.