Why can't I open read/write rules file?

I have followed the Cookbook XML tutorial exactly as prescribed, even down to using all the examples from the 'Completed' folder, but when I try to perform any procedure such as generating a EDD or reading an XML instance (the ColorDoc.xml example) I get the following in the log file:

Could not open the read/write rules file

(App\ChapterReadWriteRules)

Make sure you have read access to the file and that

the file is not already in use.

Using XP and Framemaker 7.

Its a real blocker this proble. Have tries unsetting the XP Read-only folder property on all the folders in the heirarchy but XP won't let me do that. Very grateful if anyone could help me over this problem.