I had the same problem. Xlobby worked great for a while and then after about a month I got the same error. Looking into it, it seems like it was not a xlobby problem but rather a performance counter issue that was making it not work (I believe someone already mentioned this). After googling a good chunk of the day I found:
http://www.error-bank.com/microsoft.pub ... hread.aspx
which says:
Since the Process Performance Counters are enable in
registry, based on my experience, another issue that will also cause this
problem is the missing of Counter and Help registry values in the registry
key:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Perflib\009
The system shows the Counter registry value information extracted from
%SystemRoot%\system32\perfc009.dat file for English language.
Similarly,
the system shows the Help registry value information extracted from
%SystemRoot%\system32\perfh009.dat file for English language.
If the perfc009.dat and perfh009.dat files are missing in
%SystemRoot%\system32 folder, then the above symptom can also be reproduced.
To resolve this symptom, either you could Export 009 registry key from a
good system that has the identical Operating System/Service Pack Level and Import it into the bad system.
The following knowledge base article documents how to build performance counter/help information from scratch, if the system is badly affected.
Q300956 - How to Manually Rebuild Performance Counter Library Values
http://support.microsoft.com/?id=300956
I know that is a lot of steps to troubleshoot, the one that worked for me was:
To resolve this symptom, you could Export 009 registry key from a
good system that has the identical Operating System/Service Pack Level and Import it into the bad system.
Hope this helps!