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I think I found an explanation to this. It took a while because I was looking for something described for Windows 7. But the change occured in the O/S before that, Windows Vista:

Services have...

"Allow service to interact with desktop" is checked on the Logon tab.

The Create() function in the service to create the window (a dialog) succeeds. I can't find any other Windows API calls made from the window pointer.

I am debugging a Windows service that I need to run on Windows 7. The service was developed to display a window when it is running. (Yes, I know that isn't standard operating procedure.) The window...