how do you have your site configured?
does the CSSMenuWriter/cssmw/menu.php get created at:
C:\xampp\htdocs\smartchoice\CSSMenuWriter/cssmw/menu.php
it sounds to me like you have the local files setting in your site definition to be created in a different location than the testing server is set.
Try to simplify your site settings.
if the testing server files location is set to:
C:\xampp\htdocs\smartchoice\
set the local files file location to the same directory.