I have a folder of clipart from an earlier version with folders eg. animals, transport etc. and ask to add either the clipart or the individual folders and asks if I want to create and index (there is already one in the folder) I OK then it brings up a message 'Can't find any suitable files to add to the index for the specified folder' they are all .xar files. I have tried at all levels parent Clipart and the individual folders and also deleted the two files xarainfo and that did not work either.
I agree with you Peter, the Designs Gallery is 'not fit for purpose'. I can find no way to import previous versions of clipart etc into XDProX 12, just keep getting the same error messages as yourself. I haven't tried deleting any xarainfo files as these are probably required by the original version of the software.

The best I have managed at present is to create a desktop shortcut to these older clipart files:
1: Right click on the desktop
2: New / Shortcut
3: Browse / This PC / Windows 'C' / Program Files / Program Files (x86) / Xara / Xara Xtreme / Clipart /
4: Create

You now have a direct link to your older Clipart files without the need to open the older program.

Of course there's no search function but neither is there in Version 12 Local Design Galleries

Our friends in Xara are being completely silent on this issue too.