Had it not been for virtual DJ crashing as well, I would have written this one off to a bug in the traktor code and just had to wait until the next update.
However, my gut tells me its a lower level problem and that its more OS related.
Wierd thing that it has this fault on both my windows machines (xp 32bit and vista 64), with totally different hardware.. and on that poll thread I started, although it had few replies, not a single windows user posted that the VCI works for them with midi out enabled.
The only common features between my desktop machine and my gig laptop are that they both run AVG anti virus and have realtek built in sound cards (not that they are used, but the drivers are installed). I've even tested this with AVG turned off, still no dice!
I'm wondering whether its worth the punt trying it on windows 7... alot of work if it doesn't...
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