"Failed to create process" Occurs when the game is trying to load something that has been deleted. Go through you recycling bin and you should be able to find it. Also, for Vista users, You have to run the program in compatibility for "Windows Xp, Service Pack 2"
Edit: I was having the same problem, but I just fixed it. Ensure that you have the "Game" (Orange circle thing) application the same folder as the one that has the Data, Graphics, Game notepad file, and the RPGXP Project file. You can start a new project and then copy and paste it from one to the other if you're missing it.