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It sounds like you've had a run of bad luck.
The config wizard is the older way to create security module instances and, as you've noted, requires quite a few manual steps. The ConfigTool is the new and nifty way to create instances and it automatically creates the necessary configuration on the admin side of the house. Unless you have a good reason to use the wizard you should probably avoid it and just use the ConfigTool.
I always recommend using the latest Cumulative Patch, so I'd try with CP2. If you run into trouble you can always back out and move to CP1 or remove the patch and be back at the base version.
Remember to apply the admin patch before applying the security module patch.
I am also getting the same error of isapi filter (wles_isapi.dll) not getting loaded. I am using 10.1.4.3 OES components, did not apply any patch. Looked into the CP2 but it does not seem to have anything for iis-ssm.
I have noticed the dll gets loaded when I make the IIS run in IIS5 isolation mode, but it then throws an 'HTTPFilterProc' error (in event viewer).