Larry,
I used your exact diagram to wire the switches so as far as I can tell they are wired properly.

To answer some of your questions:
1. Yes, it does enter into programming mode. And I can toggle each button between modes.

2. I have been using the maxicontroller on an outlet on the same circuit. But I also have all of my stereo equipment on this same circuit. So, my next step will be to unplug everything and try programming again.
If that doesn't work, I'll move it to another location like you suggested.
Will have to wait until tomorrow though as it's getting late
I will get back to you.
Thanks, Alden