Are you changing the location of your saved folder (the default's C:\Documents and Settings\your username\Shared)?? If you are, what happens if you just leave the saved location as the default?
Are you logged on as an administrator of your computer?

Have you tried Java 1.6? If you haven't, use the JRE offline installer here & remove all your other versions of Java before you install the new one.
http://java.sun.com/javase/downloads/index.jsp

So you have a preferences folder in the old location plus one in the new location (within Application Data)? Something's a bit screwed if you can't delete that .limewire folder. Try one of the tools here...see if Unlocker or DelinvFile (from the Ask Leo link) help & whether you can then delete the whole thing. Not being able to trash those preferences properly might be what's causing the problems.
http://www.gnutellaforums.com/showpo...35&postcount=2

See how you go with all that