I've download the latest for the git repo at catalyst. Gone through the configs to check the xdelta binary path is correct. I've adjusted the dataroot path so it has no \ or .parent paths with the line $CFG->dataroot = str_replace('
', '/', realpath(dirname(_FILE_).'\\..\\..').'\moodledata');

I've added new content to a course that's been backed up previously. Then run the incremental backup. Here's the output

Name: backup-cf101-20080514-1439.zip

• Creating temporary structures
• Deleting old data
• Creating XML file
  o Writing header
  o Writing general info
  o Writing course data
  + Course info
  + Blocks
  + Sections
  o Writing users info
  o Writing categories and questions
  o Writing scales info
  o Writing groups info
  o Writing groupings info
  o Writing groupings-groups info
  o Writing events info
  o Writing gradebook info
  o Writing modules info
  + Forums
  + Resources
  o Course format data
• Copying user files
• Copying course files
• Copying site files used in course
• Zipping backup
• Copying zip file
• Cleaning temp data
• Generate Incrementals

Backup completed successfully

I chekc the C:\projects\VLE\Mobile Moodle\environments\xampplite-win32-1.6.6.exe\development\offlinemoodle-0.4\moodledata\2\backupdata\incrementals folder and it's empty. There is a new full backup though.

There is nothing in the backup logs as I haven't found out how to enable them.