I notice nobody has responded to this. Is it still a problem? If so: 1. What OS are you using? 2. If you run 'kpsewhich xyd.enc' from a DOS prompt/terminal, do you get the path to xyd.enc? 3. If you open a new doc in LyX and follow the steps under section 2 (Preparation) in Peter's manual, which should produce a diagram with an arrow from A to B, can you output that document to PDF/PS?
/Paul
