Hi there everybody :-)
I had the same prob as tycho.
goto the xwing dir, create a shortcut to the z_xvt__.exe then rightclick the shortcut and select properties. Add this option to the string: ishost
example: "C:\Program Files\LucasArts\XwingTie\z_xvt__.exe" ishost
This will skip the direct x detection and startup the game.
Have fun guys.
Judas....