I am having an issue with 4.12.498 Service Pack 4 when creating a new simulation project using the JTAGICE MkII. When I select the JTAGICE mkII platform no devices are listed at all. If I select the AVR Simulator platform I see the list of devices. I seem to recollect a fix related to the MS XML parser that I have had no luck searching for on the forums for the past fix.
I was forced to Install JTAGICE mkII when I plugged it into the USB port as an administrator which seemed to work correctly as I can connect to and actually upgraded it's firmware with AVRStudio 4.12.498