I guess your running Windows Vista or Windows 7. The DCT setup is trying to deploy files to the lotus program directory and is being denied by the OS because your don't have the correct rights.

 

Try starting up the notes client by right clicking on it and selecting the 'run as administrator' option and then startup DCT, let it deploy the files and then exist notes as instructed.  When you restart notes and start DCT it will be able to figure out that it has deployed the files and then you can start using DCT normally.

Had the same problem, took the easy way out.

 

Erase it completely.   (both the template and the database)

 

Download the template fresh from here:

 

http://www-01.ibm.com/support/docview.wss?uid=swg24019358&rs=0&cs=utf-8&context=SWA00&dc%C3%9400&q1=dct

 

Create a new db with the template

And don't bother with the check for updates (It has bad date-time, and will always say it has one to offer)