Working on Vista Home Premium with Service Pack 1 and DW 8 (Installed from CS2 disk).
McAfee Anti-virus (not my 1st choice but PC came with it)
Site Definition Settings > Advanced > Remote Info >
Save enabled. Test verified.
Uploads work as expected.
Re-open DW, remote site log-in and password fields are empty.
Tried running as Administrator but makes no diff.
I thought my CS2 disk contained the update but maybe not.
So after running the update from the link you provided, I get 3 out of 4 Site definitions to stick.
Some progress made