Just to add on to this thread for others that may have the same problems-
I have just had similar issues on my new pc- running windows7, and I believe this is the same for Vista?
to fix it you need to browse to your program files, in my computer or explorer, right click on LMTools.exe, and choose "run as administrator" - then go on to check the box "start server at powerup" and save the service as detailed in the help files-
I hope this helps-