It can't find your VC compiler.
Try this:
1) Delete your build folder and configure to create it there again.
2) Hit configure and instead of selecting Visual Studio 10 solution like you normally would. There's a radio box "Specify Native Compiler". That will bring you to a screen with some boxes for compiler locations: you only care about C and C++ compiler here. You need to put in the absolute location of your cl.exe for both.
For me on Windows 7 for 2010 Ultimate it's:
C:/Program Files (x86)/Microsoft Visual Studio 10.0/VC/bin/cl.exe
WindowsXP is *probably*:
C:/Program Files/Microsoft Visual Studio 10.0/VC/bin/cl.exe
You should search for it though and fill those boxes in and click finish. If you can't find cl.exe then something is screwed up with your install.
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