I have Win7 x64 ultimate with SP1. The image (nookhoney04.img) is just under 4GB and the SD card is 8GB (as reported by windows).
On startup I get 5 popups with "Error 8" and then the app opens up. I can load the img file just fine and the default drive is my microSD card. When I click on write I get an error saying "Not enough space is free" and nothing is written.
I reformatted the microSD with the default setting and the result is FAT32 with 7.39GB free.
I have closed all other apps, no change.
I have tried this on a couple of PCs and I aways get the same result.
Just to test the reader and the microSD, I copied the img to the file system on the microSD card. It took 25 minutes but was successful so I know at least the hardware is working.