I am posting this topic for information rather than as a question.
I have been using B1DE 1.1 for a while without any problems.
Having installed B1DE 1.2 on two patched-up XP SP2 machines, I have found the following:
1. Notebooks can no longer hibernate or suspend. The even log claims the process preventing this is svchost.exe, but this is a red herring.
2. No other software installations are possible. For instance, Microsoft security updates fail when installing. But the same goes for other SAP software installations.
On further inspection, it turns out that the 1.2 installation appears incomplete to the Windows Installer. The symptom of this is that a couple of msiexec.exe processes are started after every reboot. These need to be killed if hibernation/suspension requests are to be successful. Also, once killed, further software installations can go ahead, though in the course of installation, the Windows Installer requests that actions from an incomplete installation of the SAP Business One Development Environment are rolled back. Doing this seems to have no effect on B1DE which is good I suppose.
The only solution appears to be to uninstall B1DE 1.2 from Add/Remove Programs.
I realise that B1DE is an unsupported piece of software, but it would be great if the installation routine problem can be looked into.