Solidrock: can you create users in the back-end through the VM interface?
I've also noticed that when I log into the Joomla back end, the first time I click on the VM component, i end up back at the Joomla log in screen, log in again, and then it works fine. I don't know if that has anything to do with it, but it seems odd.
I'm still stuck with this problem. Does anyone out there have a fix?