I get this too - not entirely sure why. The way I got around this a while back was to install the WAIK tools in Vista, as opposed to on XP. If that still doesn't solve it, you may have a mismatched WAIK/Vista versions you're running. I was able to run the BDD 2007 Beta 2 version of WSIM from RC1, but have had issues with WAIK 6.0 RTM on XP SP2 generating the same error.