Actually, quite by accident I just saw something in the program's help file that said that sometimes there was a problem with some cameras, and the fix was to make a delay before recording starts in the .ini file. Well, I couldn't find the file, but I played the tape for just a few seconds then stopped, before starting the capture sequence.
No error message. It worked. Weird huh? I'm still going to get XP though, simply because I hate Win ME :lol.