This software has been tested on Windows 7 Ultimate x86 and it works if you follow instructions below. It may also work on other versions of Windows but you will have to test it for yourself. 
If you have problems running this software on x64 bit edition of windows check this link: http://www.passatworld.com/forums/volkswagen-passat-b5-discussion/303177-vag-com-409-1-3rd-party-windows-7-64-bit.html

Install instructions:
1. Launch "VAG-COM 409.1 release.exe";
2. Change destination folder to "C:VAG-COM". Do not install to "Program Files";
3. After installation finishes move "VAG-COM Release 409-1" shortcut from your desktop to folder "VAG-COM loader";
4. Use "Launcher.bat" to launch application.

Do not close launcher window (the black one) until you finish using the app. The launcher is making app registered during the time of using. If you launch app without using the launcher you will soon notice that app is no longer registered and you will not be able to use all features