Yes, it will boot with Vista...I just tried it with my Acer running Vista Home Premium. If you weren't offered the prompt on either machine, I can only surmise that it isn't burned correctly. It absolutely must
be burned as an ISO image. Let's try another test.
Download the Windows Memory Diagnostic Tool
and save the file to your desktop. Right click on the downloaded file and choose "Copy Image to CD" from the menu. Burn the CD using the default settings of ISO Recorder. Once finished, put it in the cd-rom drive of the bad computer and restart.
This disk will not prompt you to press a key, but should boot directly to the diagnostics. This will not fix the problem you have, but will tell us if you are getting good burns or not.