First, you might try yo tun it as XP SP2 mode (right click on the file), see that help.
Another problem is if you have turned UAC off, because it might effect some emulators as well, when they trying to write to their own directory and not in a data directory.
UAC is not required at all on a cabinet basic at all, so that would not downgrade the security (personly I have allways that disabled).