I've just been playing with the FSLVBM. I thought that given then nature of nifti files that it would not matter regarding the orientation as FSLVBM would read and convert the orientation as needed. Turns out that couldn't be more incorrect. Results using a typical AFNI nifti file in DICOM orientation created a completely misregistered segmented image. Although all the coordinates were correctly identified by FSL as shown in fslview, the template images that were created put the cerebellum over frontal lobe, etc.

Thus, conversion to LPI or RPI is required for correct registration in FSLVBM. Either LPI or RPI provides good results. The RPI orientation results in right=left (Radiological), and LPI results in left=left (Neurological). Most of the registration in the FSLVBM is based on the MNI152 template, which is in LPI (Neurological) orientation. However, I've not experienced much of a difference in the results whether or not you use RPI or LPI.

Hope this helps.