There are still a few minor bugs with SED and Lite-C, but most of them don't matter that much (e.g. local variables don't show up in the "code jumper"). There are, however, many things you can do to keep the coding process going smoothly. Here are a few that I have to remind myself of every now and then:
-- Options>Preferences>Environment tab>Use the current file for Test Run should be checked. I
think you already have this set, but I can't quite tell from your responses to D3D's queries.
-- Never use Debug Run (red arrow) if Test Run (black arrow) will do. In Debug mode, any errors in your script will crash SED.
-- Save all necessary scripts, then wait a few seconds before testing. Sometimes the engine needs time to "catch up" with your hard drive.
-- Legacy mode is hard to read and not usually necessary. Unless you really need low-level DirectX stuff, just include <acknex.h> and <default.c> and go. This may be the reason for your program just showing the background: litec.h has created a window, but your script doesn't tell the window to do anything, so it just copies what's already there.
-- The more advanced features you use right off the bat, the greater the chance one of them "won't work" because you overlooked something small. Legacy mode and .X files are among these features.
Hope I didn't sound rude; all of these things used to annoy me, but I learned to work around them.