This is a bug with BSB. This bug only affects Windows 32-bit. A patch for this bug has been provided:
http://www.xilinx.com/txpatches/pub/swhelp/ise12_updates/bsb_patch_ar38526.zip 1. Navigate into the lib\nt directory of the EDK installation area (C:\Xilinx\12.3\ISE_DS\EDK\lib\nt by default)
2. Rename libHurri_Ipxact2Mhs.dll to libHurri_Ipxact2Mhs.dll_old
3. Unzip the contents of the zip file into the lib\nt directory.
This patch will become mainstream in ISE 12.4 software.