Glad that it is finally working for you too. Sorry for all the troubles
Portable App Creator searches for any newly created registry-values and/or newly created files (in certain folders) during installation of an application. So it requires a "clean install" for any app you'd wish to make portable. Using the words "clean install" doesn't mean nothing (expect Windows) should be installed on the system you're making the PortableApp on, it means that no traces of the application you'd wish to make portable should be present on the system. That's the only way to make sure that all registry-values and/or files needed by the application are created (thus 'new') on the system while installing the application.
I personally use a clean, virtual installation of XP normally. I just restore a backup every time I created a PortableApp using it...