First the code looks for a registry key specifying the location of the SiteEdit config file. This did not exist with my XPM install, so I created it.
SiteEditPath: C:\Tridion\SiteEdit 2009\
This key then tells the dashboard where to look for the config file, which contains the list of Editable sites
<siteMapping proxyPattern="http://staging.domain.com" stagingUrl="" excludeHeaders="Authorization|Content-Type|If-None-Match" />
Hope this helps