So the problem does indeed seem to be that the Windows username contains non ISO-8859-1/LATIN-9/"ASCII" characters (which seems to be legitimate in terms of Windows, which seems to be able to handle this) and thus in the path to the users' Documents and Settings directory (which, on XP, defaults to %AppData%\megaglest and thus to, e.g. C:\Documents and Settings\USERNAME\Application Data\megaglest), but MegaGlest is unable to handle such characters and still relies on this location to be accessible by default.