Finally got it fixed! In case anybody else has this problem, here's what we figured out. Since fiddler keeps a folder in \AppData\, that was conflicting somehow. If you're having this same problem, follow these steps:

1. Open command prompt, type echo %appdata%
2. Hit enter, this will tell you ...

bump

I also wanted to note that I had updated my computer with windows update a day or so before this started happening. I'm using windows 7 Home 64bit. I have tried running fiddler in compatibility mode, to no avail.

Hello,
I was using fiddler just fine yesterday. Then I rebooted my system, and tried to reopen it but now every time I try to open it I receive an error dialogue with this message:

Root element is missing.

at System.Xml.XmlTextReaderImpl.ThrowWithoutLineInfo(String res)
at System.Xml ...