"... I can not use it in advanced mode ..."
Does that mean that you don't know how to, or that your logic makes it impossible to use?
Does it work without using streams?
There is a post with examples here:
http://forums.packetizer.com/viewtopic.php?f=72&t=346
It should be fairly simple to figure out what exception is thrown if the password is incorrect, just try with another password and see what happens.
If you are looking for details regarding the error handling, look at the method ReadEncryptionHeader on line 324.
Specifically, an incorrect password is handled in line 382 and throws a CryptographicException.