I sent a testing demo of my game to one of my friends, but for some reason the character won't move. The game works fine on my system (Win XP) and my other friends system (Both of my friends use Win 7).

Any ideas why this would be happening?

Might be an issue with the map. Can you enter the menu during play? If so, you might have the erased-with-the-wrong tile issue. Try erasing every square that doesn't actually have a tile on it in levels 2 and 3 with the upper-left square of the tileset-- that's the only one that you should actually use for erasing.

Well, it's not the map, because it works fine on mine and my other friends computer and it's the same files.

hmmm have you tried sending him a new copy of the game?

Also, check to see if they can enter the Party menu and go to the different options. It might be a control interface issue.