Still sounds like a Vista permissions issue to me. Keyclone/Octopus will probably be unable to relay the keystrokes from Logitech mouse/keyboard software unless the logitech program is running with administrator privileges. This is true even when the logitech software in question works perfectly well with a single instance of WoW, notepad or whatever. I ran into pretty much the identical issue with the setpoint software for my MX Revolution on day 1.

If you're not running Vista, then you have my apologies.