Well, I've noticed that I cannot share the folders with anyone, and this is not true of folders and files that are located outside of the Program Files directory.
So...am I screwed? Do I need to re-install skyrim to outside of my program files directory?
EDIT: Yes that was the problem, and I fixed it by moving my steam directory.
That's a Win7 Permissions issue (if I remember right, you can share inside programs folder, if you try hard enough (I'm not looking for the tutorial, though!) - Win7 UAC treats Program-Files and a couple of other places as restricted.
Could you have moved the Version Controlled folders to somewhere other than Programs? Or do they have to be with the rest of the Skyrim stuff?
Nice catch, though Ducey.

It seems like you have it working now? Can you try to remember to post to let us know if it keeps working?
(and which setup guide did you follow, if you followed one at all?)