Under Windows Vista, the operating system will silently provide different versions of certain files to help pre-vista application compatibility. WM 2.1 no longer needs this help, and in fact in an upgrade situation the Vista technology has the wrong (old) world.ini file substituted.
Alternatively, you can simply install into a different folder name than you originally did, and everything will work normally.
To fix:
If you’re upgrading, make sure you delete the contents of the %User/Appdata/Local/Virtualstore/Program Files/World Machine 2 Professional (or Standard) folder. You can do this before or after installing (preferably before).
Note: Under 64bit systems, it will be in the %User/Appdata/Local/Virtualstore/Program Files (x86)/World Machine 2 Professional folder.