somehow I was expecting the portable version to be configured to look for settings and friends in the directory containing the exe. It doesn't by default I guess.
what are you saying happens -- that its creating directories under user\documents and using that directory instead of the executable directory, even for portable version?
Ok i see the problem, the portable version mistakenly has a ConfigDir.ini file in it, when it should just have a ConfigDir_Default.ini.
Delete the ConfigDir.ini and it should work portably as expected. I've reuploaded a new beta without the ConfigDir.ini.