I had the same problem, and realised I had to browse into the Ubisoft folder on the hardrive. Trying to run it directly from the DVD didn't work. As I'm using Vista 64, it was the following location:...
If it is in CAS (create a sim) then whenever you click on the items (hair, eyes, clothes...etc) then wait until it gives more detail. You should see a little garbage can on the lower left, or right...