I actually do not support this product anymore. This project was originally developed on Windows XP by reverse engineering the KFM files in a hex editor, and cross-referencing the results between multiple animation files until I had documented (almost) every byte in the file. If memory serves, there was only a small portion of the file that went undocumented. If the 32 bit and 64 bit operating systems require different types of KFM file, then the program will not work. I don't see that being the case, but stranger things have happened.
In any case, it works on my Windows7 32bit O/S.
The error, however, implies that the exception was while disassembling the KFM file. There is literally NO custom code between the "Select KFM file" and KonverterFM. It's Window's select file dialog box. The entire interface, as the user sees it, was a frontend to a C++ version of the program that ran as a command-line tool and was converted to C#; so if you're going to experience an error before Decoding/Encoding, it's going to be a permissions issue (Windows isn't allowing you to open those files)
If, however, it's a program issue in the disassembly process, it either points (again) to a permissions issue, that Windows doesn't know how to operate this program, OR that the file is using a different format from what I designed this tool to read/write. The following steps should remedy all but the last case, and I don't use a 64bit operating system; nor do I have the documentation for KFM files anymore.
Hopefully, the following steps will solve your problem.
If you are working on a copy in your Program Files tree, try copying the file out of your Program Files to a working folder that you "Own" and have admin rights to; that way, if it's a permissions issue, you can do the changes and copy them into the "Game's" folder when you are done editing.
If that does not solve the issue, try running it in 32-bit compatibility mode.
If that still does not solve the issue, try running it in WindowsXP compatibility mode.
If that STILL does not work, try running it in 32-bit Windows XP compatibility mode as an administrator.
The ONLY error-catching this program has is to prevent you from trying to decode a KFM file that does not exist. Other than that, it will encode EXACTLY what you tell it to. If you don't finish your XML file, it won't finish the KFM file; if you have errors in the XML, it'll encode those errors; if you encode a blank XML file, you'll get a "Blank" KFM file.