I might of found a weird bug (or maybe an annoying feature). Can someone check their permissions for the HKEY_CLASSES_ROOT key in the registry? After is validates the license my permissions change (see screen shot). I'm trying to see if this happens to anyone else.
Well, it seems that if Sony Vegas (v6 or v7) are installed at the same time then my permissions get changed. If only one is installed then my permissions remain intact. Took some patience on my part but I finally figured it out. Now to send an e-mail to both these companies and see why this happens.