I think that's the very question at hand, Shadowdude777: Why doesn't it work when it does for so many others? I suspect a driver issue in the OP's case since his device isn't showing up at all.
I don't understand why I and others have had to move the sbf file to the root of C:. That doesn't really make any sense, but it was a simple thing to test and it immediately fixed the problem. I still suspect it's a Vista 64 issue, or an issue with RSD Lite on Vista 64. Who knows. I had already seen the video you posted and I found very detailed step-by-step instructions elsewhere on this site. I was doing everything right, but the process was still failing until I moved the file to a different directory.
Perhaps someone who knows more about RSD Lite should shed some light on the issue.
EDIT: On a side-note, my Droid is having some hardware issues and my replacement unit should arrive tomorrow. So, I'll get a chance to try this all again tomorrow night. I'll try to test this issue to see if I get the same results.