John,
It might be that User Account Control (UAC) is getting in the way of DDE working, since it involves launching a process on your behalf (Excel) and that's a big red flag that the UAC likes to stomp on.
You might be able set an exception policy, or try to turn off UAC and see if it helps.
Going to Vista now? Really? I'm surprised, because at this point many people have skipped Vista and jumped to Windows 7. Windows 7 has scaled back the User Account Control stance a little bit, I think in response to incompatibility issues like this one.
Chris