Once I've done the copying of the DOTT and S'n'M files in the "setup" section of Q + E 3.5, I go back to the main screen, and then try and start a game, and nothing happens. If I then quit Q+E and restart it, I get an error saying "unable to open Monkey1.gif" (or the picture for whichever game I'm trying to use). Has anyone come across this error before? I'm using XP Home, btw.

Uninstall it, delete its folder and reinstall.
Also install the vdmsound components again, it sounds like the vdms launchpad isnt working, you may need to restart your computer after installing it for it to work.
All Q+E download links are here (http://www.lucasforums.com/showthread.php?s=&threadid=79875)