buzzie:

Success!  I also am using Vista on these machines and tried GyroScope's method to no avail, but he steered me to C:/Users/Public/Public Documents/Pinnacle/Program Files/Pinnacle/Studio11/programs/Sites/  This is where I had 2 folders named for my PC. 

 I recently changed the name of my PC, and Pinnacle seems to keep the old name as well as the new in this location.  These folder keep files Pinnacle needs, and I guess the error for me came from the program not knowing which folder to goto.  I just deleted the folder with the older PC name and Studio 11 fired right up! 

No more errors!  Finally after 2 weeks of this.....  Hope this solution can help someone else, Bryan see if you to have a second folder there named something other than Bryans-PC, if so delete it and restart Pinnacle, hopefully no more "Initialization failed"...................letme know......