ironman,
I just wiped out xolox completely and re-installed myself to see if I could reproduce what happens to you. And i could not reproduce it.

My suggestions are this:
1)Try manually setting the download folder within XoloX. Tools > Preferences > Downloads Tab. manually set it to the desired folder.

OR
2)
- Uninstall XoloX and completely remove the folder.
- Then go to start > run > type in 'regedit'. Navigate to HKEY_CURRENT_USER > Software > XoloX. Remove this key.
- Reinstall 1.20

Hope this helps