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    Just an addendum to that, the helloupload does appear to have uploaded most of the hellocanvas theme... the specific error above is:
    C:xamppxampphtdocsmagento1mediahellouploadhellocanvasthemeappcodelocalMage) [function.dir]: failed to open dir

    If I look on the server I see a folder
    "C:xamppxampphtdocsmagento1mediahellouploadhellocanvasthemeapp" but inside that folder there is no "code" directory... only a design directory.

    So it is copying over, which suggests rights are fine... are you sure the install.xml is correct?
    Thanks,
    Al