Under Vista with UAC enabled, I call WLRegNormalKeyInstallToFile but the file license is created in a Virtual Folder in Vista. Is that correct?

That's a feature in Vista when UAC is enabled and the application is not running with admin's rights. The license file will be created in a Virtual Folder like:

C:\Users\UserName\AppData\Local\VirtualStore\Program Files\YourAppName

When WinLicense is reading the license key, Vista will redirect the file reading to that Virtual Folder (and if the file is not there, Vista will try to read the license from the same folder as your application).

To avoid those issues under Vista, you have the following options:

1) Create your file key under a defined folder in WinLicense. Please, check the following KB entry.

2) Use Registry licenses instead (with Registry root HKEY_CURRENT_USER)

3) Protect your application with a manifest to run your protected application with admin's rights. You can do this in the Extra Options panel.