When installing the latest version of XAMPP 1.8.1, it appears the default working folder set on the shortcut properties for the app is incorrect. It is set to [installdir]\tmp instead of [installdir] (e.g.: "c:\xampp\tmp" instead of "c:\xampp").
One unfortunate consequence of this is that when attempting to run some operations in the XAMPP control panel, you get erroneous "path not found errors". For example, if you attempt to install or start the Tomcat service straight from a fresh install, you get a "path not found" error because it tries to set the CATALINA_HOME folder to "c:\xampp\tmp\tomcat" (presumably because the batch script used to manage these operations assumes you are running them from the same folder the scripts are located in, which is c:\xampp).
Again, this should be a small thing to fix but will hopefully help save lots of people undue headache when configuring XAMPP on windows.