Mine does not say "problem with, Microsoft Image Composite Editor", it's just that "nothing happens after selecting pics in the windows live gallery and then clicking "autocollage".
Also, if I try opening autocollage from the desktop, and hopefully browsing to add pics; this isn't possible either, as it automatically begins loading every picture from the windows live photo gallery. And I can't get it to do otherwise.
I've tried unstalling/installing, several times. Same result.