Not sure as to the reason it doen't work. Try do work arounds such as turning off Fences, but still it wouldn't work.
I am running on vista home pre. on my laptop T3200 dual 2.0g intel. Jumped over to my desktop (dual boot on a intel quad 64 bit OS) and Fences work on both vista and win 7. So the problem appears to be in the laptop. The possible problem could be in Vista SP2 beta I am testing, and if that is the problem I'll just have wait and see if a future update corrects the problem. Not testing on the dual boot machine (didn't want to take a chance since I am also testing win 7).
If any one else is testing SP2 beta for vista without the prolbem please let me know.