Anyway, it is allowed for sure ... so make sure
1) you set the directory properly
2) set a profile in Settings->Hosting profiles
3) copy any file into that folder
Okay, I double-checked everything.
I set up FiU on a separate system from scratch too, added the registration key.
When you mention "2) set a profile in Settings->Hosting profiles," is "Settings->Selection Profiles" the same thing? That's what I see in this version, so I set it up under there. I also get the red text "You have to set up a profile (Selection profiles)" after I set everything up. Is it supposed to still say that? Also, I am able to check and uncheck "Active" on the Folder Monitoring screen, so I assume the program understands I'm allowed to use this feature.
I understand that I might have to wait until you're back in a few days.
UPDATE: I just tested FiU on the other system and it works now! I'll let you know if there's another hiccup, but it seems fine now. Thanks.