Tower.js on Windows 7: Cannot read property watchfile of null

I've followed the installation instructions for Tower.js, and am getting an error when I try to start the server.

TypeError: Cannot read property 'watchfile' of null

My steps for installing have been-

1. Install node.js
2. Install mongodb
3. Install Ruby and Ruby dev kit.
4. Install Tower.js-

sudo npm install design.io -g
npm install tower -g

1. Generate app

tower new app
cd app
sudo npm install
tower generate scaffold Post title:string body:text
npm test
node server

I get an error on npm test-

> ./node_modules/mocha/bin/mocha $(find test -name "*Test.coffee")

'.' is not recognized as an internal or external command,
operable program or batch file.
npm ERR! Test failed.  See above for more details.
npm ERR! not ok code 0

Running node server, the server starts up, but gives continual errors

c:\Projects\MyProject\node_modules\design.io\lib\design.io\extensions\watchfile.js:7
    return project.createWatcher(project.watchfile, {
                                        ^
TypeError: Cannot read property 'watchfile' of null
    at Object.module.exports (c:\Projects\MyProject\node_modules\design.io\lib\design.io\extensions\watch
ile.js:7:41)
    at Object.module.exports.extension (c:\Projects\MyProject\node_modules\design.io\lib\design.io.js:11:
6)
    at Object.<anonymous> (.:14:22)
    at Module._compile (module.js:449:26)
    at Object.Project.read (c:\Projects\MyProject\node_modules\design.io\lib\design.io\project.js:168:22)
    at Object.module.exports.coffee (c:\Projects\MyProject\node_modules\mint\mint.js:187:18)
    at Project.read (c:\Projects\MyProject\node_modules\design.io\lib\design.io\project.js:167:21)
    at fs.readFile (fs.js:176:14)
    at fs.close (c:\Projects\MyProject\node_modules\design.io\node_modules\hook.io\node_modules\npm\node_
odules\graceful-fs\graceful-fs.js:94:5)
    at Object.oncomplete (fs.js:297:15)
Forever detected script exited with code: 1
Forever restarting script for 1 time

I am new to Node.js, and on Windows 7 64-bit. Any hints as to what could be causing this error?