I flash all the time through vista, don't let anyone tell you vista has problems flashing
try rebooting your computer - WMDC freaks out on me sometimes and won't recognize my phone until I restart - could fix your problem..... You should also be able to flash straight from the bootloader screen instead of restarting your phone again and trying again from inside windows mobile.....
you can also find RUU_Signed.nbh from the folder that the exe extracts itself to - I believe you can also open the exe in winrar and extract it that way - rename this file titaimg.nbh put it on your sd card (the 512 meg stock one that came with the phone preferably) and stick it in your phone and hold down the power and camera buttons and hit the soft reset button with the stylus to get into bootloader and it should recognize that the file is there and start flashing. Make sure to remove it afterwards so it doesn't want to flash next time you boot into bootloader....