Hi,
the error means that either the path to the tour.xml is wrong or the xml file itself has syntax errors...
when running Javascript locally then the 'Browser' doesn't return more detailed informations about the problem,
Well, syntax was correct, but... I had added some unsupported XML tags - that was the trick... don't use that which can't be used. Thanks for the breadcrumbs.
When all else fails, reread the instructions

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http://www.krpano.com/iphone/#supportedfunctionality
I went back to the basics, did a simple tour without all the complexities of a full blown tour, and it worked.
I now know a little more.
Thanks so much for your support and wonderful product and efforts. Honestly I don't know how you find the time to answer all the questions from us no-brainers and still do what you do.