The cause of the problem is that after installing numerous other MIDI devices in VISTA it takes up slots pushing the padKontrol past midi entry 10, which most likely causes the problem. Yes, they also have a problem with Windows installing the wrong driver also, but this is another separate issue. You need to fix this first issue also before it will properly install. Clicking on the Install shortcut should be all that's necessary or EzSetup.exe in the Korg USB-MIDI Driver folder
My device was showing up in midi 12 and 13. It creates a new entry for every port you install on. The way you can view this is go through the uninstall process, but stop shy of viewing the midi channels. This will help you decide which MIDI devices need to be uninstalled. I'm not sure of another way in Vista to view this information, or to change the midi assignments. The Korg software was also incorrectly detecting an Axiom controller for a Bluetooth devices, so I am not sure about the complete accuracy, but as far as the Korg device is concerned paying attention to it will ensure success.
Additionally I had also installed Maple which may have been taking up some slots, but I am not 100% sure about this. I know I have heard about MIDIYoke causing problems. Just to be sure I uninstalled this along with all M-Audio MIDI drivers and both my Firewire sound cards. After following the upgrade process I was able to free up slots for the device. I plugged it into a hub that I am using as well as a port directly on my laptop. Make sure that you keep using the SAME port otherwise it will have to re-install again thus creating problems in the future. I went ahead and installed on two ports just in case. Now I am adding my devices back slowly.
In the photo above it shows the MIDI entry before (midi3) and after (midi2) fixing the incorrect driver installed when plugging in the device into different ports.
I also contacted microsoft to download a Hotfix for MIDI devices KB938055 http://support.microsoft.com/kb/938055
Ports for a MIDI device may still appear as available in a MIDI application after you disconnect the device from a Windows Vista-based computer
(I'm not sure if this will fix any issues regarding this as this appears to be an isolated issue with the padKontrol)
And yes the Editor works just fine...
Just set in preferences
padKontrol 1 Port A (midi in)
padKontrol 1 CTRL (midi out)