Thanks for the response. PDQ is working fine. It's overwriting that file correctly. It's a hard issue to explain.
The software is what is unfriendly. Once it's installed it asks for a share location for the DotNetConnections.xml. This is how the software authenticates and allows a user access to the software. Upon further investigation it seems the DotNetConnections.xml is a large repository of all the AD users that have been setup to access the software. Each user has an entry in that XML with a unique encrypted password (auto generated). So basically the software will analyze the XML file once input and it will look for the AD username. If it finds the username it'll grab the encrypted password and allow the user into the software. If it cannot find the username they receive an error saying they lack security access to the system.
I've checked a couple user machines running this software and each persons SSSettings.xml file on their PC has their unique encrypted password associated. So unfortunately each users xml file is unique and the Spreadsheet Server software is the piece that needs to generate the file.
The software vendors support is lacking so as of now this still in a mystery to me.