I’m not using MikTeX myself but someone I developed a class for. And it seems like there’s a problem with xstring. The following MWE compiles fine with my TeX Live 2012 but MikTeX (on Win 7) can’t find the package, although it seem to be installed correctly installed. Furthermore MikTeX should install missing packages on the fly, shouldn’t it (the feature is activated)?
\documentclass{article}
\usepackage{xstring}
\begin{document}
Test
\end{document}


xstring.texfrom CTAN manually and put it somewhere where it can be found (e.g. in your current folder, or in a local texmf). – Ulrike Fischer Nov 5 '12 at 9:12