Well I tell ya Cliff, don't know what it was. I didn't even have to reboot.
For some od reason, I had Messenger 8.1 running in the background but no window was attached to the process (dead app).. anywho, I killed that and Xion's window popped up.
Not sure if that was the problem, and I doubt it was, but it did the trick.
I know it wasn't a sound card issue as I disabled play on load. I would think it would be a problem if Xion was attempting to play a song on faulty drivers. I can say the KX driver I use for my Audigy has never had any issues that would do that..
yet :p
I do wish I could pin point the problem and solution better, in case some one else ran into the problem. but I think I would need some sort of debug version or unless there's a way to get debug info in a command window with this build.
I do have MS's development studio with full debugging enabled on my machine, so if you need some type of tests in that area, let me know.