check the login account of that service program -- it may not have permissions to do that. Also service programs do not have a console, so it might be waiting for someone to press the <Ok> button in a message box which can not be displayed.

I don't see the purpose of launching installation programs from a service program anyway. I know I would not want a service program automatically installing something on my computer without my explicit instructions to do so.

Thanks for your reply,

I have checked the login account of the service and discovered that when I changed the "log on as" information from "local system account" to "this account", everything worked fine.
However changing to "this account" option disables the "allow service to interact with desktop" option which I need to use.

Performing setup automatically is one option of the update service which I am working on. This is why I need that kind of information.