I emailed HTC and got a response a day later. it worked perfectly. here is the message:
Thank you for contacting us it is truly appreciated.
In regards to your problem, we can certainly help you with that.
I am sorry to hear you are still having issues. You may have a background program conflicting with the installation. We can disable all background programs and then start the installation again from scratch to do this:
1. Save any work
2. Uninstall HTC Sync
3. Start>Run>msconfig (Or windows key+r for run)
4. Services Tab, tick hide all microsoft programs (at the bottom of the msconfig window tick it)
(This is very important to click on hide all microsoft services first or computer issues can occur - be sure to tick this box)
5. Now once that is ticked, click on disable all (MS services are hidden as you ticked the box so they will not be disabled now)
6. Startup Tab, click on disable all
7. Close/OK then restart
8. The PC will restart with only essential MS programs running
9. Click on do not show this again
10. Install HTC Sync
11. Plug in your PDA
Is it working now?
If it does not see the below steps:
On our device browse to Settings > Applications > Development and then tick the option to enable USB Debugging. Now re-connect our device to your PC via the supplied USB cable.
Is it working now?
If it does not, or if it does, we still need to re-enable all of your background programs that you have installed on your PC to run in the background.
1. Start>Run>msconfig
2. Services Tab, click on enable all
3. Startup Tab, click on enable all (leave any unticked that you do not want that may be slowing your PC down - this is up to you)
4. Ok/Close restart
5. The PC will restart back as normal
Now go into Sync Manager> Tools>Repair
Is it working now?
Please let us know how you get on and we will assist you further if and when required as a matter of urgency.
We trust that this resolves your query, please do not hesitate to contact us again if and when required as a matter of urgency.
Thank you for contacting HTC.
Best regards,
Mat B.
HTC