This looks like an excellent addon. I really like the idea of it, especially being able to organise games how I want them - something which steam itself (including big picture mode) is very bad at.
When I ran it for the first time (v1.0.8), I got a message, "Cannot6 locate steam at C:\Program Files (x86)\Steam\steam.exe"
I have steam installed to a custom location: G:\steam\steam.exe, but I had already entered that in the steam binary location box.
I'm now waiting on it scanning my games library which may take a while...
Suggestion: update the first post in this thread with the current version of the script.
Edit: When it finished scanning the games, I tried running one and of course it failed, with no error. I opened settings and found steam folder was listed as program files; so my guess is on first scan, it gets changed to the default even if you have entered a custom location first.
I changed the steam location in settings to the correct location, and this time successfully ran a game.
I shut XBMC down, then started it up again, and opened the addon - and it started scanning the entire games list again.
I then installed this addon on to my Media Centre PC (above test was on desktop) and hit another problem.
Steam is set to start in offline mode, and so pops up a dialog on launch - "do you want to start in oline mode or offline mode". Your addon doesn't account for that, and games wont run until one of those choices is made (the dialog may be behind xbmc, and so it wont always be apparent why games aren't loading.)
I experienced the same problem here- each time i relaunched xbmc, the addon needed to scan all 396 games again. That makes this addon a non-starter for me. I hope you can fix that.