ftpmng --update-user failed

[webaus]

we are unable to setup hosting because of the following error:

Unable to update hosting preferences: Update FTP user failed: ftpmng --update-user failed: Incorrect function. (Error code 1) at Set reparse point 'D:\inetpub\vhosts\Servers\1100\localuser\username'

brand new install on windows 2008

any one know how to correct this?

also noticed FrontPage isnt installed and i assume this is because IIs 7 doesnt support it?