Hi,
I recently upgraded from Vista to XP myself so no longer have a Vista machine to test but its working fine for me in IE7 under XP so I suspect it may just be security setting differences in Vista, like I know I used to see warnings about MSXML using Vista and the file browser does use xml so you may need to poke around in the browser settings and loosen it up a bit. Another possible cause is if you upgraded you may still have some old FCKeditor javscript or html files in your browser cache. I would delete temporary internet files and see if that helps.
By default child sites are not allowed the Administration > File Manager because it allows direct access to the server file system. If you want to enable it for child sites, set this to true in Web.confog or user.config
<add key="AllowFileManagerInChildSites" value="false" />
Hope it helps,
Joe