Hi,
I have a very similar problem with WDS built into Vista.
Whenever I'm trying to add relevant folders to be indexed, I'm refused. When clicking on Modify in Indexing Options and the Show all folders button and saying Yes for UAC prompt, the Indexed Locations dialog shows my C: drive but lists only the folders before the RRBackups folder which I don't know whether belongs to Lenovo's backup software or is the recycle bin of Vista, but its name inevitabely starts with an R. Unfortunately my relevant folders are called Stuff and Work and therefore I do not have a chance to have anything really important indexed but my mails.
These folders were created by the same account and are configured with the very same permissions that were used to create folders starting with letters that advance R in the alphabet and that are displayed in the dialog. For example, I could index my Annex folder if I wanted to and if it were not created only for the sole reason of testing and confirming this bug.
I couldn' believe nobody recognized yet during the 9 months of Vista that a folder named Work cannot be indexed...
Looking for any helpful tips,
Gus