Problem with Template Detection: Windows Live Writer cannot detect and download the latest theme of your blog for Live Web Preview.
Solution: Make sure the following snippet exists in your blog header (in the <head> tag)
<link rel="EditURI" type="application/rsd+xml" title="RSD" href="http://www.myblog.com/xmlrpc.php?rsd" />
Problem with Speed: Does it take too long for you to start Windows Live Writer or it hangs for no reason ?
Solution: Windows Live Writer checks for software updates in the background and this may slow down the software or make it consume lot of your CPU power. The solution is to type services.msc in your Run box, select the "Windows Live Setup Service" and press the "Stop" button. It won't do any harm if you disable the Windows Live Setup Service forever.
Problem with Publishing: When you publish a new post on WordPress, you get an error message saying - Invalid Server Response - The response to the metaWeblog.newPost method received from the weblog server was invalid: Invalid response document returned from XmlRpc server."
Solution: This is relatively a new problem which I noticed only after upgrading to Wordpress 2.2.1. In most cases, this error is misleading because your blog post has already been published online (goto WordPress Dashboard -> Manage Posts).
However, as the response is invalid, WLW would not know that the post has been processed successfully so it would save it the Drafts list instead of "Recently Posted" items list.
Related: How to Switch from Blogger to WordPress
Problem Adding a New Blog: When you try to add a new blog to WLW, the software throws an error - "Windows Live Writer was not able to automatically detect your blog: Invalid Server Response - The response to the blogger.getUsersBlogs method received from the weblog server was invalid: Invalid response document returned from XmlRpc server"
Solution: Add the following lines of code to your .htaccess file contained in WordPress installation folder where the xmlrpc.php file also resides. Thanks Alpesh.
<Files xmlrpc.php> SecFilterInheritance Off </Files>
Problem with Image Upload: You get an error message saying "The following images cannot be published because the weblog does not support image publishing" - Window Live Writer would then suggest you to configure your FTP server for uploading images.
Solution: This generally happens when you include big images (file size) in your web posts. To resolve this error, either reduce the size of pictures (resize, use jpg instead of png) or configure WLW to publish images via FTP or upload images manually using the Web based Wordpress editor and then include the hyperlinks in WLW posts.
Also see: Essential WordPress Plugins