To address the first question, the gPPI toolbox loads the files based on the first level SPM.mat file. In that file, the fMRI files are stored in the SPM.xY field.

In order to figure out why you got that error message, can you attached the screen output from MATLAB. There should more outputs that can help narrow down the issue.

To do this more specifically, if you take the parameters P, you could run [Pout, errorval]=PPPI_checkstruct(P).

Let me know these two results and I can help troubleshoot the issue.