The latest version does not show a dialog/error anymore. The subacl thing is very risky but it turned out to be the only solution. It's definitively a problem with Windows Vista. There are thousands of reports of users having the same problem with Windows Vista and other applications as well (Office, Skype, Adobe, etc). My personal recommendation is to reinstall Windows Vista since there is an underlying problem with your installation. I know this is rather radical step but it might turn out to be the best.
As MD of a software company I am concerned that you are directing people to a risky and potentially dangerous procedure without indicating it is dangerous and giving no instruction to backup their registry. Against my better judgement I followed your instructions which stopped Outlook from working. I have since restored my registry (yes I backed it up) which has solved my Outlook problem.
So before I (and other readers of this post) spend around 3 days re-installing Vista and all the software I need and my data, what are the details of the problem and how have you diagnosed that "Vista is broken" and the only way to fix it is a complete reinstall?
I have no intention of re-installing Vista because in my view it is not broken - all other software I use (which is a lot in my profession and includes Office, Skype, Adobe, etc that you mention) works perfectly. Only SmartFTP v3 doesn't work. Even SmartFTP v2 worked!
I suspect the issue is nothing to do with Vista being broken, it is more likely a software compatibility issue. Do you platform test on different operating systems? Do you check your software against other common software such as firewalls?
So since I cannot use your software I am afraid I will not be buying it anytime soon. I will however download the latest version periodically to check if you have solved the real problem. It is after all a great FTP program. If you want to remote desktop share or need any further information from me to help you investigate further, I would be more than happy to help.
I would recommend you edit the post that instructs people to run this dangerous routine and state it is risky and also explain to people less technically savvy how and what they should backup if they decide to go ahead.
In the meantime I leave readers with a warning. Think twice about running operating system level hacking routines just because you were directed to in a forum. If you must, ALWAYS back everything up unless you are prepared to lose everything.
If you are not technical and you are directed to reinstall your operating system, seek advice - it is all too easy to underestimate the time it will take to get your computer back to its former state or to lose information such as personal files, software license keys, emails, settings, drivers, etc.