it might be an issue with DEP, that would explain the process loading but the window not. i have it fully disabled by changing /noexecute=optin to /execute=optin in the boot.ini
it wouldn't be the first time DEP has caused issues with an emulator.
well, if mudlord would like to help, i am going to read a few things on directinput and see about moving it from sdl to dinput, that will raise compatibility, to include Xbox 360 controls and anything else built on the common class controller spec.