I just posted a detailed manual xip porting guide here on xda:
http://forum.xda-developers.com/showthread.php?t=438676
Found a way out to how to do it. The solution to the above problem I posted is to:
1. Either use XIP & SYS of the same build
or
2. Use Gwes.exe and Gwes*.mui from the same build as the XIP
