Well, you describe some similar symptoms that I am having. I'm looking for answers also. I'm not sure that we are having the same problem, so I'll describe mine, and you can tell me is it is similar, at least one of the symptoms.
This is most likely a different problem altogether.
Nero Express is not saving some options for me. I recently started running XP SP2 as non-admin. Installed NeroBurningRights, and all is well until you select "Copy Entire Disc" which fails for non-admins, because the default image file location (single CDR on this box) is on %SystemDrive%\Nero Image.rng, which a non-admin cannot write to.
I can manually select a file location that is writable, and all works, but it will not save this location, so it hast to be reselected everytime it's used. I can deal with this, but other computer users find this daunting, as they don't understand and don't remember the limitation. Support suggested updating to the lastest version, but there was no change.