Are you useing SP1 for XP or SP3 for 2000? Posted on the website:
Important Note for Service Packs users: Sadly, the new Service Packs (SP3 for Win2000 and SP1 for WinXP) did big changes in the handle of ActiveDesktop, and the Flash Dock won't work at all in this systems. Although you'll can install it and see it, when you click over an icon the screen will become white; it's because Windows stop all the activity and unload the Active Desktop when the system detects the ActiveX control used to launch the shortcuts. Since it's not a flaw (nor in the system nor in the dock) I'm afraid that will be hard find a solution in the near future. Sorry for this inconvenience.
Too bad. Grrr. Guess I'll wait until Moby gets his working right unless this is wrong.