Error, "Unable to write to TOADPARAMS.INI" using Schema Compare on a VMWare ThinApp (4236430)

When using Toad for Oracle via VMWare ThinApp 4.01 the following errors occur:

Unable to write to C:\Documents and Settings\<user_name>\Application Data\Quest Software\Toad for Oracle\9.7\User Files\TOADPARAMS.INI

The problem occurs 100% of the time once it starts happening; when doing the following (there may be any number of steps between):

1. Open connections to 2 databases.
2. Run the compare schemas function.
3. Open a file differences window.
4. Open 2nd file differences window without closing the first.
5. Close one of the file differences windows.
6. When I close the 2nd file differences window Toad abends.