Okay, I solved my own problem. I'm posting it here in case someone else has this issue.
For me it had to do with scripting.
I was getting an SWF error message whenever I opened dreamweaver - from googling I found this error message isn't an error and it can be ignored, but you do need to do something for SWF.
I went to "Insert" --> "Media" --> "SWF", then I pointed the document to the test page I was currently working on. Dreamweaver then installed two 'Script" files for me. I then deleted the test page but I now have a folder called "Scripts" that dreamweaver set up, and now everything works great.
I'm not 100% certain what I did but 4 hrs of trying and clicking random things seems to have worked. My suggestion is to beef up the trouble shooting guide for this product.