In the original Replication Files for "The Allocation of Talent", there was a file named EstimateTauZ.m and a different file named estimatetauz.m. In Linux, this is not a problem, but I understand it can cause problems in Windows/MacOSX.
The new TalentReplication701.zip set of files replaces EstimateTauZ.m with EstimateTauZ_main.m, so this should solve the problem. Sorry about that!
(Matlab also recently introduced its own replace.m command, so I've renamed mine to replace_chad.m.)