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I bought the game on Steam, downloaded the Darksaber Ultimate Craft Pack (the latest version) and basically patched it (with the official 2.02 patch) to upgrade XWA with the Pack. After that I noticed that I kept getting an error every single time I ran xwingalliance.exe. The error message read "Failed to detect X-wing Alliance CD 0xc0000022" and knew there was a solution as this never happened before.
Turns out there is an option called DIRECT PLAY which is a Windows Feature that needs to be enabled in order to run the game. You can find and enable it by going into Control Panel and on the TOP LEFT corner of the screen you'll see "Turn Windows Features on/off". Find Legacy Components or something to that effect, enable everything in the subcategories and restart your machine.
And voila! X-Wing Alliance works like a charm!
Sorry, i Should have added... everything was working fine. When I try to launch the game from either the desktop shortcut or from Steam, the steam mini-window pops up for a split-second, then disappears without doing anything. I've disabled all Anti-virus programs, firewalls ... i've re-installed several times. Turns out i purchased this right after the June update so I never played it before it was updated. I have no reference for any changes if there were. It was fun while it lasted.