Wonderful :) I'll look into what other camera service is conflicting and make sure the setup guide disables that automatically in the future. (Update: Dang, I can't make it fail with all the services on. In both Direct Mode and Wi-Fi Access Point mode. Weird.)
Direct mode works fine for me here, so I wonder if it's just a hiccup on your side - try again? In case something's gone really screwy, you could try killing the app completely (swipe up on it in the multi-tasking view) and launch it again.