Production Assistant doesn't care where Vegas is installed only THAT it's installed. It looks for the existence of the Vegas key in the windows registry but does not care where it points to. There may be a possibility that this registry key did not get established.
Did you download this today? The current installer on the Sony website should correctly detect Vegas Pro 11.0. Older installers may not recognize VegasPro 11.0 but will still have the version number 2.08 because the product didn't change at all, just the installer was updated when VP11 was released.
Try downloading the installer again. When I get to my laptop I'll check it too (I'm currently on my iPad so I can't check right now)
~jr
http://www.johnrofrano.com
http://www.vasst.com