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The program failed because of a hardware protocol issue.
using a Null Modem cable on com1 for both computers.
The OP wants :
...direct connection ...via a connection using either the serial port, parallel port or the infrared port of each computer..
Breakinout, whoever told you to use a null modem cable was not giving all the details. You need to either use a cable prepared by one of the vendors, or you have to make one using the instructions found elsewhere for the specific program. Generic null-modem cables do not have the specific hand shake signals required by certain programs.
In any case, using a parallel port cable can be a better choice.
Did you already read this material?
http://en.wikipedia.org/wiki/Direct_cable_connectionA better choice, IMHO, is to use Ethernet. You get a cross-over patch cat 5 cable to tie two computers together. Or plug both into a router, hub or switch using standard patch cables.
EDIT:
Cables that are compatible with Direct Cable Connection
http://support.microsoft.com/kb/142324EDIT AGAIN:
Pardon me. MS is not longer supporting all the features of the files and settings transfer wizard.
Transferring over a Direct Cable Connection using parallel or serial cables and using floppy disks is not supported.[5] These methods were supported in the Files and Settings Transfer Wizard in Windows XP
This does not make ,it clear at what point they stopped it. It says XP. But that may not mean the last version, XP SP-3. Hard to say. I have not used it is so long a time I forgot what does and does not work right.
I recall the parallel port cable worked fine and the pins outs are well-defined. The serial pins outs ate poorly defined.Thee are two many variations of what a modem cable should be. Many published definitions will not work with some software and hardware implementations.