The “Cannot Run Graph” error is mostly related to a failure to setup audio recording. Open Settings, Help, Audio Troubleshoot for detailed help.
This error can also be related to the version of DirectX installed on your machine. You need to have version 9 or higher installed in order to run WM Capture. You should make sure you are running DirectX 9 (or 10 if your graphics card will support it) and that should take care of the problem. You can update your DirectX from Microsoft’s site here.
Also, you might want to try uninstalling WM Capture, restarting your computer and re-installing it. Usually this has to be done for it to realize that the proper version of DirectX has been installed.