The previous answers are pretty close in answering your question, however, I'll spell it all out for you.
For obvious reasons, when Windows Vista was being developed, Microsoft couldn't make sure, on their own, that every single peice of software out there would work with it, so it sent pre-release versions of Vista to the big manufacturers such as Symantec, Nero, Norton, Adobe, Macromedia etc., etc.
With that said, they were putting the ball into the manufacturers court and telling them they should make their software work with Vista. After all, this is the most logical thing because Microsoft shouldn't cater their software to work with every other peice of software, right?
Anyway, know that you understand how all that works... I can tell you a good portion of software created in the past few years will work with Vista. If it doesn't, and you can't find an update available on their web site to make it work with Vista, plain and simple the manufacturer has been too lazy to get their software to work with Vista.
You'll find that the vast majority of Microsoft software, including office XP and Office 2003, will work with Vista.
As for third-party programs such as Nero, you'll find the vast majority of them have updates that will allow them to work with Vista. So, unless you've upgraded your copy of Nero in the last 90 days or so, I can promise you that it won't work with Vista. They were one of the ones who updated their software very quickly.
To counteract some of the stateemnts above by other members -
Vista is not trying to fix and make everything compatible. The issue is with the manufacturer of that software and whether of not they want people to still be able to use their software after purchasing Vista.
Yes, by default, Vista prompts you on many security issues. Sometimes too much, I admit. But wouldn't you like to have it tell you something is trying to make a change to your system rather than not? Yes, you can turn these security alerts (called User Access Control) in the Windows Users section.
By someone saying they're sure you're going to encounter issues with dvd4free just because of Vista's security issues, is a show of their ignorance. With all due respect, that is. But the truth is, my friend that DVD4Free is a Rootkit Trojan (a virus) and you shouldn't use it.
See the links for proof:
http://www.castlecops.com/o20list-141.html
http://www.greatis.com/appdata/d/SysDir/d/dvd4free.dll_Removal.htm
All in all, Windows Vista is an excellent operating system and is MUCH more than just fancy eye candy. The new security features are absolutely wonderful, the way it handles files, etc make it well worth the investment.