I built a windows service, targeted for .NET 2.0 in VS 2008. I run it as a console app to debug it.
Console app is working great. I put it on my local computer as a
I'm not sure I can speak to #1 or #2, but when I've had problems like that, it was because of incorrect threading/concurrency. I'm not sure how large your app is, but that might be a good place to start.