I'm not getting the same error. Mine is just xlobby sits there, showing the Loading: Setup screen. No error boxes. I've tryed leaving it for over an hour, but it still just sits there.
I'm also having other computer problems with a delayed right click menu in explorer, so it might be related to that. After a long search on the net and trying out loads of things, i think my registery has got broken. I've just started a backup of my HD and am going to have the joy of a windows re-install tonight. I'd lots loads of unused stuff on the disk, so a clean start might be a good thing.
Just means i'm going to have to set up my HTPC again