I have just installed Acrobat 9.5.2 on a new Mac running Mountain Lion 10.8.2. Watched Folders don't work. When a .ps file is placed in the IN folder, it get processed by Distiller, but no PDF file is produced. The Distiller log window claims the PDF has been produced and placed in the Out folder, but it's not there. The .ps file is moved or deleted, depending on the setting.
PS files can be dropped onto Distiller in the normal way and PDF files are produced correctly, so it's not a problem with permissions. The problem persists in a new user account, so it's not a User pref issue.
Another Mac with the same setup works fine, so it's not a compatibility bug. I have seen only one other forum page with a similar issue, relating to Distiller 6, but it's not clear what the solution was.