I am not able to make a new project. The hardware key is connected to the pc.

Please check whether or not you are using a coder license key (see Help menu, About The Observer XT, press User info button). If you see a license number starting with OC080/OC090/OC010, you have the wrong hardware key. Please look for a FULL license key and use that one.

The Observer XT 8, The Observer XT 9, The Observer XT 10