The ReaTIvision MIDI setup video helped A LOT! Specifically moving the Midi demo.xml file out of the Midi folder into the main folder and in the xml file itself moving the MIDI config line into the active code from the comments area. See the video for more details.
I also installed the MIDI Yoke driver.
Settings that worked for me. Opening Midi Device: Out of MIDI Yoke: 4
In Midi-Ox input port 04 in from MIDI Yoke: 4
MIDI easier for non-programer types...
"TUIO vs. MIDI
The application can alternatively send MIDI messages, which allows to map any object dimension (xpos, ypos, angle) to a MIDI control via an XML configuration file. Adding and removing objects can be mapped to simple note ON/OFF events. Keep in mind though that MIDI has less bandwidth and data resolution compared to Open Sound Contol, so the MIDI feature is meant as an convenient alternative in some cases, but TUIO still will be the primary messaging layer.
A user at the reaktor forum posted this brief tutorial on how to use reacTIVision in conjunction with commercial audio software such as reaktor. "