First let me congratulate you - that is one of the best screenshots I've ever seen on this forum!
The problem you are running into is that the 7.x version of LV does not handle ref parameters automatically. However, you can use a couple of handy VI's in vi.lib to convert a LV string into a .NET object and pass that in. On the way out, convert the output from .NET to a LV Variant, and then back to a string. A bit of the pain, I know, but we are fixing it.
See the following for more information: http://detritus.blogs.com/lycangeek/2005/05/some_handy_vis.html