During install of v6.4.5 on a box running Windows 7 x64 Ultimate SP1, selected option to use the program directory ("C:\Program Files (x86)\Notepad++") for config files. Confirmed that doLocalConf.xml exists in that path, and yet, the config files and plugins are nevertheless written to "%AppData%\Notepad++". I think I tried this over a year ago and the "portable" option didn't work then either.
Do you mean the "Don't use %APPDATA%" option? It needs to be on indeed.