try pasting the path %localappdata%\GOG.com
The %localappdata% variable corresponds to your user\appdata\local directory, so the %localappdata%\GOG.com should do the trick.

Same problem, target does not exist.

Try creating the GOG.com and then running the downloader, to see if that creates the logger.log file. If this fails as well, I'd suggest uninstalling and re-installing the downloader.
P.S. What exactly was the error message, other than looking at logger.log?

Tried creating the folder, but the log file was not generated.
Attaching a snapshot of the error popup

P.S. I re downloaded and re installed 3 times till now. Used Revo Uninstaller for uninstalling.

Ever since I joined gog.com, I have been watching with admiration your every move and always waited for the next brilliant idea that you might come with. Unfortunately, this is the first time when I must say that I am deeply disappointed about your choice. I was forced to update from the old Downloader version (suddenly stopped downloading), only to be horrified by what you have done with this new one: it requires installation (the old one was self-contained), the Setup silently installs that dreaded NET Framework that I never want to see on my Windows XP computer (I almost had a commotion when I opened Task Manager and saw it running), the installer fails somehow (my computer starts rebooting before I get to click on "Reboot later") and I am also annoyed by the balloon notifications (that can't be turned off). I know I am simply one of the 3 fossils :) that might complain about the .NET and everything, but it would be nice if you would just fix the old Downloader.

Installed but verification failed, will install and see.
The specs as Win7 64 bit, 4 GB DDR3, Amd 95 BE, MSI Geforce 460 gtx.

Edit: It did the job. Working now

The new stable works just swell. I was able to download three games and all their bonus content after having left them in a "Paused" state all day (roughly 16 hours) without a single WER crash. This may also be due in part to the fact that I disabled my modem's "TurboPage" function (sort of a parabolic motion calculator for satellite modems; turning it off reverts all connections to "straight line" connections), when I figured out that it did more to hinder me than help me.

I came across the same issue. It seems to occur if the %APPDATA%/Roaming/GOG.com directory does not exist during the upgrade. I did not have the directory by default, so the install/upgrade process should take care of creating it first.

Now to a more serious issue I'm having with the downloader - I cannot see any of my games. :)

I can login fine but have never seen the 3.0 stable or 3.1 beta show anything in the list. The "GOG.com downloader mode" is enabled in My Games through the web pages.

*** Added later: Oh wow. I simply had no idea that you have to click the button on the webpage to make a game appear to the list. I thought one would see all the games automatically. Some "how to use" introduction could be useful for us dummies...

The new Version of the Downloader installed just fine for me, but it's worling rather bad.
IT allowed me to download 1 game just as usual but all the other files I tried to download with it download at a speed from 250B's to 2,50KB's tops.

My normal connection speed is 1,5 MB's and when I download the files manually from the page I get that speed.
I wonder what that is all about.

i have speed problems with the latest update of the downloader. Previously i was able to reach 1m and now im stuck to a lousy 320b.
anyone knows what the problem may be?

Personally, I find that the download speeds are fine for the first few minutes, and then it's as if something invisible decides to hog my internet. GOG downloader slows down, and so does anything else that uses the internet. Closing the downloader doesn't help, either. To reiterate, the something invisible hogging my internet only ever appears after starting GOG downloader, and it doesn't go away until I restart my computer.