1- Uninstall the Kobo Deskotp
2- Restart the computer
3- Install the Kobo Desktop 3.8
You can download the Kobo Desktop version 3.8 and will still work with XP:
https://dl.dropboxusercontent.com/u/...ilds/XP3.8.exe
-had to do the set twice, and another factory reset, then setup again, and working now