I feel your pain. Just got my PRS-700 for Christmas and the Sony E-book Library app won't run. It installed just fine, but it dies silently and no process hangs around in the task manager. I tried installing it differently using the /a switch and plopping in registry entries (which were there already mostly), but still nada. E-mailed sony reader support to see if they have any say on it.
The only thing I want to do is to manage collections. I have a bunch of PDFs and I want to be able to assign the PDFs to collections and such so they're better organized. Calibre doesn't seem to let me do this, and Calibre also doesn't seem to show my SD card in the 700 either, which would be handy. Adobe Digital Editions doesn't appear to have any collection management features for the reader, so we may just be stuck until Sony fixes their E-book Library app.
Luckily, with the influx of new PRS-700 owners this Christmas (since the Kindle is out of stock), perhaps Sony will get a decent number of support requests indicating they should light a fire under their asses and get it fixed ASAP?
Their decision to treat 64-bit Vista and OSX like niche operating systems is despicable. Earlier OSX and 64-bit Vista adopters are possibly more vocal/active and would be great Sony Reader salespeople if the software would work.
I've got VMWare and other machines available to me I could run it on, but it's the principle of the thing.