Windows server 2008 does not allow interactive services. In fact it gives you a nice message if your service is set to allow interactive services.
The ProcessName Process service is marked as an interactive service. However, the system is configured to not allow interactive services. This service may not function properly.
When a service is setup in VS 2008, under the Properties-Services setting, there is a check box for "Enable client application services". Are client application services considered 'interactive services' by Windows Server 2008?