Thank you for your interest in our product. We haven't seen the issue you are talking about before on XP. Unfortunately, we cannot tell you right away what the problem is and we will need some more information. Could you please tell us what exactly is the error you get? Just paste the message in your reply. Also, I think this may be related to your IIS settings. Can you make sure that your IIS server is configured as outlined in the Sitefinity User Manual (this can be found in your installation through the Start Menu, or online at http://www.sitefinity.com/documents/UserManual_3_1.pdf). Try opening the site with different browsers and see if there is any difference. Sitefinity creates a virtual directory in the Default Web Site on your machine and the path to that directory is http://localhost/telerik/sitefinity3.1. This is the project manager used to create new projects, so that is what you have to open. We would be happy to help you if you provide more detailed information.
the Telerik team