I know Vista has some issues with the dongle protection system. Not entirely sure whether its due to x86 or x64 addresses, but i know Steinberg dont support Vista at this moment. Cubase 4 is the same.
I can only suggest a clean re-install of the application, and make sure no other applications are running in the background that may cause conflict. Very generic answer i know, but the best starting point.
Tell your mate im envious he's got Nuendo 4 too
Edit: While Windows XP and the Apple PPC platform continue to be supported, Nuendo 4 also runs on latest Intel-based Macintosh computers and on Windows Vista. The latter, of course, not only in 32 Bit mode, but also as a real 64 Bit compilation allowing the user to scale projects to an unknown maximum and address up to 128 GB of RAM in a single computer.
If the above doesnt work, i'd check to see which version he has installed and check over at the steinberg forums to see if there are any issues that others are getting. I'd also check system/software stability.
turned out he hadn't installed the firewire driver for his external midi/synth box (not sure what it was, looked expensive)
installed them, and it worked, then i removed the av, disabled defender real-time scanning, tweaked the visual appearance settings a bit so it's faster, patched up past sp1 and used tweakuac
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