Since it seems like a permissions issue, I found instructions on this page
http://help.x-cart.com/index.php?title=X-Payments:Setting_up_file_permissions_for_X-Payments
After finding that the "privileged mode" is enabled on my server, followed the "terminal" commands and modified permissions as specified on this page for privileged mode:
$ find . -name '*' -type d -exec chmod 0711 {} \;
$ find . -name '*' -type f -exec chmod 0600 {} \;
$ chmod -R 755 var public lib/XPay/Templates lib/XPay/Skin
After making these changes, backed up and ran install.php again hoping for different results. Still going to the link found in the email and hitting a page with an "internal error" rather than a page that prompts me to change my password.
Can you offer any suggestions on what to try next? The errors in the log file are not turning up any results when I search so I'm at a loss for what they should be telling me.
ERROR [2012-05-10 15:06:14]
User: unknown; IP: 97.97.157.123
Zone: Model
Code: TARGET_UNALLOWED (843)
Unallowed target - "\"blank\""
Affected systems: Model/Permissions.php file (373:assert); Model/Permissions.php file (486:checkTarget); Transport/Router.php file (148:checkRouterInfo); Application.php file (147:__construct); /var/www/html/xpayments/admin.php file (26:run)