kandc4u,
Are you sure you're not using easy sharing? Otherwise you may want to try 'mounting' the iso file in windows with daemon tools and see if that works properly.
Putting a full copy of the files in a folder is not supported (yet) in the UDA. It will probably come in a future realease.
Also, please check if you windows (host) machine is a domain controller, this thread looks like it has the same problem and that a newer kernel may have solved the issue: http://www.fedoraforum.org/forum/showthread.php?t=100193