Hi.

I have the same problem.
(Windows 7 enterprise 64 bit, Java 1.6, sts-3.1.0.RELEASE - tried all variants: zip, installer, update Eclipse Juno)

Steps:
view Servers -> New Server -> vFabric tc Server -> Create new instance -> name=MyTcInst, template=base -> Finish
I got error "Server Error Creating server instance. Check access permission for the directory ... "
Using the instructions, I changed folder owner and added to myself all permissions. - Doesn't help
I started STS or Eclipse as Administrator - Doesn't help.


When I create new instance on command line, it is created successfully. I can run it from command line, deploy simple war and it's working.
But again, I can't use the existing instance from STS: it is created ok, but failed to start.
"Server VMware vFabric tc Server Developer Edition (Runtime) v2.7 at localhost failed to start.
An exception stack trace is not available."