Datacolor User to User Support Group.

Interesting thing is if I set assign the profile using the spyder util, then go into color settings in vista's control panel and change from the spyder generated profile to sRGB, everything looks the same in color managed and non colormanaged applications. 

Believe you hit the core of your problem right there.  I don't run Vista but XP, and I had the same thing happen to me - when I opened an image in Photoshop, all colors looked super-saturated.  The problem was self-generated though, since I had assigned the Spyder-created profile in the Display Properties -> Advanced -> Color Management as well - it needs to be sRGB there since the Spyder-generated profile is loaded separately.  What you seeing in PS is the Spyder-generated profile applied twice - so to speak.