Sharepoint Designer workflow not creating.

Hi,

I using Office 365, SharePoint, SharePoint Designer 2010; I created a simple list from the Office 365 and added two items. I looking to create a workflow for the list and to do so I using sharepoint desinger , SharePoint Designer launches, prompts me for a workflow name and after I give it a name and description it doesn't create or proceed to create the workflow...thoughts?
 
thanks,

RK