Found the issue - had to unhide folders in explorer and copy XML to:
C:\Users\UserName\AppData\Roaming\Avid\Sibelius 7\Playback Configurations\
Perhaps edit your install material to include this direction for Windows 8 users?
C:\Users\UserName\AppData\Roaming\Avid\Sibelius 7\Playback Configurations\
Perhaps edit your install material to include this direction for Windows 8 users?