This was a problem that affected some earlier releases of the 2002-2004 versions.

In the 2006 version, make sure "install for all users" is checked when installing.

If you are using v2002 or v2004, then you are probably logged in as a user that does not have read/write permissions for the MediaLab/DirectRT folders. This will cause the license check to fail. Windows XP seems to deny this privilege to regular users by default and so it needs to be set by someone with administrator-level access. The following steps should make everything work while logged on as a regular user:
  1. Log on as an adminstrator
  2. Right click on the MediaLab/DirectRT folder and select "Properties" and then "Security" and ensure that regular users have "Read/Write" permission.
If you do not see a "Security" tab, then open "Folder Options" in Control Panel. On the "View" tab, make sure "Use simple file sharing" is not checked. It should be one of the last options. After it is unchecked, repeat #2 above.