We have a laptop with Windows 7. When trying to connect with IP it gives an error that just says it can't connect. The IP is correct. I repaired the software, un-reinstalled the software version 1.2.3 rebooting in between and still won't connect. The only change that was made recently on the laptop was windows updates. Otherwise this laptop is not used for anything else.
We had similar problem. By mistake we clicked the play button on People+Content twice (like double click). And it worked. We have Windows 8. It might work for you.
I tried it today and it's working again. So maybe Windows updates or something else broke it, un-reinstall didn't fix it but maybe several reboots did fix it. No way to know.