I'm baffled too, though I'm thrilled that it works for you. That means there is a fix - I just have to find it.
Our computers are pretty similar - mine's an HP Pavilion laptop Dual Core 1.86, 2 GB Ram, NVidia GeForce Go 7400. Even with the mini to mini FW cable, I don't see that likely being the problem.
I'm really curious to see how the HD3 shows up in your device manager. I looked tonight on my XP machine (HP Desktop) and when I plug it in the Device Manager doesn't show any change - it doesn't list the camera at all. But, when I clicked on show hidden devices, it showed me two new devices when I plugged the camera in - these were the following:
61833 Device Class Bus Device
AVC Device Class - AVC Device
I could click on either of these to see the driver associated with them. If your Vista unit is doing something similar, maybe we can find the actual driver that Vista is using to communicate with the camera and I could try that. Take a look and let me know what you find.
I ran a Windows Update tonight to see if that solved it - it did a couple updates, but nothing changed.
I'm still puzzled by the fact that Vista recognizes the camera when I plug it in as a "HDV-VCR" - not sure if that's part of the problem or not but still seems strange.