One more thing, could it be to do with Windows Updates?

I've got my computer set to automatically download updates and think it was downloading something yesterday.

Hello, if your shared folder is giving an error report there is definatley something in there thats making Santa crash....
I dont think it has anything to do with the updates though...
When the error report from your shared folder appears click on the part where it says more information (I think its something like that, I dont have an error report in front of me lol) Find out the code of the error and then do a search of your comp for that file, when it finds it delete it...

Once you have that done go back to your shared folder and see what file has gone..Santa should work fine from then on...

Please let me know how your going with this

Perhaps all you need is an updated XviD codec: Nic's Binary - XviD_Install.exe - NEW

Hmmm, try what Aaron has suggested, that could be the solution...
Please keep posting back and letting us know..
We will fix this...

I've installed the new codec and I still get the error message. Is there anything else I need to do once I've installed the codec?

Ok...Try removing Santa and all traces of it off your computer and then download it again http://www.dvdsanta.com
We will see if that makes a difference now...

No such luck! I uninstalled, restarted and installed it again but still got the error message.

I'd be happy to use remote assistance, if anyone is willing and thinks they might be able to get more of an idea of what's wrong.

Check that .avi file with this thing: video-fixer

The last file that I burnt is being encoded. Well, it's still going. When I try to burn the file that I want, the error report usually pops up after about 10 secs, but the old file has been going for about 3 min without any glitches.

I've just tried the Video Fixer. Can't check it without registering, but clicked to fix it and then tried Santa again. Still get the error...

Unless, do I need to restart before any changes come into effect?