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I had the same problem when I installed Procoder on a freshly installed win2k machine. It could not open any file complaining the same as what you are seeing.
Then I installed the latest version of DirectX, I think 8.1. Now I am happy again
I go back to the demo version download site and read the instructions again:
"
ProCoder DEMO does not include an MPEG-2 decoder. However, if you already have a DirectShow-compliant MPEG-2 decoder (most DVD-playback software includes this) then ProCoder DEMO will be able to import MPEG-2 files as sources.
"
I find that although I 've installed windvd and powerdvd,I still cannot import mpeg2 file.
So, I began to search other mpeg-2 decoder.
And by using google search, I find a mpeg-2 decoder called "ELECARD MPEG 2 Video Decoder Package".
After downloading it and istalling it,my canopus procoder can import mpeg-2 files!!