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a guess: he cannot find rrdtool.exe or he has no privileges to run a dos command. Try to make shure that cacti has te right pad to rrdtool and that IIS is given an administrator account because otherwise he is not allowed to call dos commands (which that fgets() or popen() is doing)
Thanks for you suggestions - I did that but it did not make any difference, I don;t particularly like give these sorts of rights to and internet account though I think I may install it on a Linux box instead