Alcohol Soft claims Microsoft is blocking their and CD/DVD burning software from other companies to ensure compatibility in Windows Vista:
They have actually placed a hard block on the device drivers for the time being, to stop the virtual drives from loading. It is more than likely in place to help them beta test Vista without having reports from beta users regarding virtual drives, which might complicate things. We are working with them at the moment to ensure there are no incompatibility problems in the future.
As a result, “As of this time Alcohol 120% will not work in Windows Vista Beta, although we do hope to support it once we get past the RC1 release and further,” Alcohol Soft says.