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>VFP does a static read of certain environmental registry values into system variables on startup - you may need to force a refresh. This a is a SWAG, but you might try issuing a SYS(3056) to force a re-read of environmental veriable settings from the registry; I haven't tried it.
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Tried and no help :( Anyway I won't be digging this for the moment. I'm willing to believe it's a bug of W2000 RC2 (next version might have other problems in XML parsing as Rick said). I won't be going back to neither Win98 nor Win Millenium just for this :)
Cetin