Thanks guys. I tried the dummy book and author and I can easily create a directory directly under C:\Calibre\Calibre Library. No problems.
The weird thing is that it cannot even download anything from internet.
Here is what I did so far, all to no avail.
1. Copied the current calibre library to another location
2. Uninstalled Calibre
3. Physically removed Calibre directory (delete from C:\)
4. Reinstall Calibre 1.5.0
5. Try to add a book (no success) or download Economist (no success) or download another magazine at random (no success)
6. Clean all registry entries that have the word calibre and redo the whole thing and try again all of he steps in 5 (no success)
7 Run Calibre as Administrator and then try (no success)
I still do not know why this happens.
But nice to know that there is a community out there that helps!
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