Since my original post i have managed to change the compatability of the program to Windows 2000, so the program now opens but does not recognise the dongle. It says:
"A VectorWorks dongle could not be found. make sure the dongle is connected and that all the required drivers have been installed. VactorWorks will now quit"
My computer knows the dongle is there as it installed the drivers when i first connected it, and i have been through to try and update all the usb drivers but they were all up to date already.