One generate the hdlutils.ini is to run Export > Quick Connection View for some reason even if you aren't using HDL stuff this file is expected to exist.
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This can be ignored, there are some settings that get written to this file that really don't belong in there, it's on our list of things to tidy up. As Shannon mentioned, running Export - Quick Connection View will create the file (one of the items whose settings shouldn't be in this file). Verify doesn't use it and no longer issues the warning in VX.1.
Shannon, Robert, thanks for the explanation. One other thing that was throwing me off, I was surprised to see "0 Errors" shown on all the test I ran, and this was part of the reason I didn't think the test was running (due to the reported error). After I opened the "Rules" tab, and found that no checks were selected, that explained why Verify DRC found no errors.
Why are all the checks disabled by default (confirmed this by selecting some checks, then hitting bottom left "Defaults" button, all checks disabled again)?
I guess it's difficult to know what checks a user is going to want, but I would have expected at least of couple of basic checks would be selected to run by default.
The behaviour is a little odd, but as you say, we'd have to second guess what the user wanted to test. It is improved in VX.1 as it will at least tell you how many checks are enabled.