Can you create a texture material normally?
Material Manager > New Material > Add Shader - Texture2D > Browse
There is no setup in XPression for the drag and drop to create materials. I imagine it's a Windows 8 issue.
You can try this:
* Right-click on desktop->choose Personalization.
* Select High Contrast #1 and the select Windows and exit Personalization.
* Go to Control Panel->System->Advanced System Settings->Settings under Performance.
* Select Let Windows choose what's best for my computer->uncheck top three in list i.e. Animate controls…, Animate windows…,Animations… + Apply + OK
* Open XPression and the masking should be gone.
#XPression