Something seems to be seriously wrong either with Windows XP or VC++2005. One of my friends is unable to run an application of mine, and the problem has been tracked down to a native win32 DLL that I've been building with VC++2005.

The main problem seems to be the SXS information being embedded in the DLL. Dependency Walker spits this out:
  Error: The Side-by-Side configuration information in "c:\complex\sys\SOFTFX.DLL" contains errors. This application has failed to start because the application configuration is incorrect. Reinstalling the application may fix this problem (14001).
If I make VC++ spit out an external manifest, then we have:
Error: The Side-by-Side configuration information in "c:\complex\sys\SOFTFX.DLL.manifest" contains errors. This application has failed to start because the application configuration is incorrect. Reinstalling the application may fix this problem (14001).
Error: The Side-by-Side configuration information in "c:\complex\sys\SOFTFX.DLL" contains errors. This application has failed to start because the application configuration is incorrect. Reinstalling the application may fix this problem (14001).

Unfortunately, this makes NO SENSE, because the manifest looks like this:
<?xml version="1.0" encoding="UTF-8" standalone="yes"?>
<assembly manifestVersion="1.0" xmlns="urn:schemas-microsoft-com:asm.v1"><assemblyIdentity version="0.0.0.0" name="SoftFX.dll" type="win32"></assemblyIdentity></assembly>

I'm stumped. Any ideas? For now I'm hoping I can build a VC++2003 project file and compile with 2003.