EmperorFool
Deity
I also thought the "cannot find settings folder" was a more general BUG/BULL problem as I have experienced it with other BUG-enhanced mods (more specifically Dune Wars).
Check in your My Games and My Games / BTS folders for a folder called "BUG Mod". If it's from an older version of BUG--no folder inside called "UserSettings"--get rid of it. It would really help if you could follow the instructions on the Troubleshooting page (see my sig) and post your PythonDbg.log and PythonErr.log files.