Same problem here. I'm glad I'm not the only one.
Canon MVX250i Digital Camcorder (2 months old, it's a model or 2
higher than the original posters MVX200 but basically the same
machine) connected via firewire (VIA 6306 chipset). Windows XP Pro
SP2.
Connect camcorder,
turn on,
ding dong,
pop up asks me what I want to do,
select WMM,
WMM opens,
then the capture window pops up,
select "Canon DV Device", click next
click next on the capture file page,
bong, popup says "The video device cannot be used at this time because
there has been an error when starting the device".
If before clicking "next" the first time, I select "Configure" I can
successfully control the camcorder (ff, rew, play etc) via the "Camera
Settings" button so I know that they are communicating OK. But if I
click "Video Settings" I get no options available which may be a
clue...
ArcSoft Showbiz (1.3) works although it doesn't seem to have all the
facilities I want.