What version of the XDK are you using? And what is the exact type of project you are creating?
I have version 3491 and I tried creating a HTML 5 + Cordova project based off the Blank template and it worked fine.
This may be interesting to whoever is debugging this ...
When I had that error, the framework showed my project folder as 'secondApp', but was displaying my first app. When I removed both apps (deleted them from disk) and went through the wizard to create an app from the same template, it worked ok.