I'm a little confused, in one sentence, you say that the wizard will not open, in another sentence you say that while in the wizard, the form functions tab will not respond?
some things to double check:
make sure your site is properly defined for Dynamic Development:
http://www.webassist.com/tutorials/Define-a-dynamic-site-in-CS5
create a new blank php page, and save that to your site. have that page open when you start the form builder wizard.