Ok, after putzing around last night and not having any luck connecting to the KFlop I pulled out my Windows laptop. I had just rebuilt this with Windows 7 Home Premium to use as the controller for my lathe. I rebooted, connected the KFlop and got the "installing new driver" dialog. And waited and waited and waited. After 15 minutes I clicked cancel. I tried replugging the KFlop back in but the driver install process did not reoccur. I downloaded the 4.32 installer and ran it. On this machine, the installer ran perfectly fine to completion. I have all of the apps and stuff installed now. I launched KMotion - and again Not Connected.
I am sure the issue is the device driver. I tried to follow the quick start on USB installation but Windows 7 behaves differently than what's shown on page 2 in the guide and does not display the Found New Hardware Wizard (disclaimer, I have only used XP for the past 10+ years, I just got Windows 7 a month ago and have been using it on this laptop and my Mac on a VM so I very well might not know what I am doing!)