Going back over this thread, I see that there are probably two quite different problems being reported:
1) Some people are reporting that instant send is not activated at all. (I’ve had that problem in the past, but not for some time now.)
2) Others (and the thread starter, I think) are reporting that instant send is activating but grabbing the wrong thing (i.e. the parent folder of a Finder item, rather than the selection).
I can regularly but not uniformly reproduce #2. I still haven’t nailed down the exact triggering circumstances. But it’s common. Sadly, it’s been teaching me to SLOW DOWN and CHECK what instant send has grabbed, every time — at odds with the power of speed that LB usually gives me.
This is LB Version 5.1.3 (719) on 10.7.2.