I can verify the MCSX runs on Win XP Home. I run a VirtualBox with XP Home on my Linux box (PBP3 does not play nice on Linux, but that is another issue). So, as much as I dislike MCSX there is not a problem with it running.

The next time you get the error message, post here what it says it will send to Microsoft. (click on the "click here"). Maybe we will see the problem?