Before going to all the trouble to update your OS, I would suggest:

- updating BIAB to latest version 433. The log file you posted above showed 432 and 431 being run.

http://www.pgmusic.com/support_windowsupdates.htm

If that doesn't work, de-install your antivirus program. Disabling them temporarily often doesn't work.

The log file you provided above was the compatibility assistant in Windows telling you that the bandina box file couldn't be run. That could be a number of things, like an antivirus blocking, but perhaps the solution lies in compatibility settings. BIAB runs fine in all versions of Windows 7 including 32 and 64 bit, so somethings out of place on your system when it comes to running bandina box

Have Fun!
Peter Gannon
PG Music Inc.