NCHer, thanks for your quick response.
Because there was nothing in the Output Folder drop down window I tried a number of things... I typed in manually: "[same as source file]" and "C:\Users\Mark.MARK-PC\Music\[same as source file]" of which I would have thought it would have tried to write into C:\Users\Mark.MARK-PC\Music\ folder where I keep all my music. I have not had issues writing to this folder.
I am thinking that the software is trying to write to a folder called: "[same as source file]" which is not a valid folder.
Can you confirm that the drop down box should have "[same as source file]" as an option?
Thanks again!