Pixelpost should NOT delete the config file if you properly revised your code. The line I told you to comment out is the only line in the whole install process that is capable of deleting the config file...
Either way, I'm glad you got it worked out. I'm not sure why you two were having such trouble as this is the first time I've heard of an issue during the install process since Pixelpost was released with it.
Are you both running IIS?