Errto answered your second question, and holli answered your first. The only other tidbit left to mention (other than reiterate that you should post your code to avoid people having to 'guesstimate') is this:

If doublequoting your paths does not work, there is probably a line in your code that is calculating the current working directory relative to whever the script (or exe file) is placed. To check this, try running your script from a path that you are certain contains no spaces in the path, then move it to one that does contain spaces. If there is a difference, then you have found the problem.

Normally WinXP can handle paths with spaces in the name, but that still does not save the day if you are passing that path to an external process or cmd prompt utility, or any of the other myriad sources that do not handle spaces as you might expect.