I'm using File Magic at home and the wifi connection between my iPod Touch and my desktop is perfect. All works great.
At work, the network is a bit different. Our desktop computers are on a different network than the wifi computers. So obviously the iPod Touch won't be able to talk to the desktop. So I've installed a wireless card into my desktop (WinXP SP2) and created an adhoc network. This network has worked great for other iPod Touch apps (i.e. Discover). But it just won't work in File Magic.
I launch the app on my desktop (WinXP). On my iPod Touch, I touch the red wifi icon in the upper left corner. It glows while I'm touching, but other than that, it doesn't do anything. I've reversed it and started it on my iPod Touch first, then launch the desktop app, but no difference. I have files on my iPod Touch and the desktop cannot see them.
Since I followed the proper setup when creating the adhoc network, and since Discover works great, I assume that the adhoc network is properly configured. But maybe File Magic is not smart enough (yet) to properly see/use the adhoc network.
(Maybe if it showed the name of the networks it sees or some other info about the networks, that would be helpful when troubleshooting on both devices.)