Here is the trick to wave2lip:
A) First of all, both the program AND the wave file must be in the same folder before you drag the file onto the program.
B) Secondly, there CANNOT be ANY spaces in the path to the program and file. For example, placing them on my desktop won't work, because the path to it is this: "C:\Documents and Settings\Andrew\Desktop". There are spaces in "documents and settings", so it won't work. If I just put it in the C drive, it would work, because the path would be: "C:\".
I hope this helps. I know I had the exact same problem with the program. It wasn't until recently that I read a post explaining how to get the thing to work. So spread the word whenever possible!