I have the same problem with my VWD2008 Express, and I have updated the system. I can login using FTP with the VWD2008, but I can't list the remote directory.
The web server only use actives connection, and I can use FTP via MS-DOS shell normally, it work's perfect if I list or change files on the remote directory.
I'm using a Windows XP with SP3 applied, and I uninstall the firewall in my box.
If I use VWD2005 Express in other computer, I can download and change my files on the remote web server normally. I suspect that the problem is the FTP client of VWD2008, it may be only works in passive mode and I've uncheck the passive option from my IE 7.
I can look the network connections using MS-DOS shell, I can look that the 21/TCP port is established, but when list the directory, the networks connection try list files using high remote port on the web server. May be that ftp client VWD2008 works only forced using passive mode.
Ideas how fix? Thanks