I don't know about the Vista question, but I can tell you that WME is definitely able to create 1st person games. It's simply a matter of writing actor=false; in the script. Scenes can then be set up in much the same way as for a 3rd person game, just leaving out the walk areas, and anything else that is required only for 3rd person games. You can find several 1st person game in the game list on this very website - check them out.
As for the coding - it's really not that difficult - I started with no knowledge of it at all, but after following the instructions for making the demo game, I soon found my way around it, and if you have problems, the people here will help you. I don't if there is "much coding" required as I'm not sure what too much coding would be. I find it acceptable though. Everything has its own script virtually, which keeps the projects organised and well structured.
WME is the best engine out there, unless you want 360 degree 1st person. It's my wish that WME had this feature - then it would be able to do everything except full 3D, and there's plenty of time for that in the future