As promised, I tested latest Glade installed under Windows XP. Steps I took are:
- Download latest binary from here
- Install it into C:\Glade
- Run Glade from start menu
Everything worked as expected here, since installer took care of modifying my per-user environment variables (variables that have been set are GTK_HOME, INCLUDE, LIB and PATH).
I'm not sure what went wrong with your installation, but some of the options that are possible are:
- variables haven't been properly set
- you have some other GTK+ runtime environment installed in PATH (I think GIMP installs it's own, same goes for Pidgin)
You'll need to investigate a bit on your own to determine what exactly went wrong.