I believe the .dproj file extension is created when you are using the Dashboard to create a new project? However I don't use Dashboard. I only use the DxDesigner vx1.2 while creating a new project (.prj file extension).
If I am only using DxDesigner do I still have to do the same changes as you mentioned above? Could you also be little bit more explicit as to where those above changes (xml version = 1.0 etc...) have to be made? Also the dummy .dproj would have to be created using VX1.2 ?