Sorry everyone this is a response to another posting in another thread, I press the wrong button and started a new tread by accident.
I had the same problem, with the same error message when I first used it. The problem is your trying to run it within windows xp, but the tool doesn't have a user interface as such. You need to run it from the command prompt. So click start, all programs, accessories, and select command prompt. Now I don't know what path yours is set to, but here is what I do. I type prompt: and then press enter, it clears whatever is showing and returns a single colon, so you have
Now note I keep the msxml tool in a directory called msxml on my c drive, note no spaces in the directory name. So to run a command I now type this from the prompt:
:C:\MSXML\msxsl thexmlfile.xml thexslfile.xsl
and then I press enter, the results will show up on the screen.
If you want the results to be put in a file then you can add to this, like so:
:C:\MSXML\msxsl thexmlfile.xml thexslfile.xsl -o filename.xml
Now it outputs the result to an xml file, which by the way will probably be placed in the folder the original path was set to when you opened the command prompt, so you should find it there.
I hope this helps.