When running Yawcam as a service, everything works perfectly until a user logs out. At this point, the service appears to stop working properly and the service (or the computer) must be restarted to restore functionality.
OS: Windows XP Home
Yawcam version: 0.3.8 (Yes, it's out of date, but this doesn't appear in the changelog so I assume the bug is present in 0.3.9 as well)
Webcam: Microsoft Lifecam HD 5000
I'm sorry it doesn't work for you.
You are right in that no change has been made to the part of Yawcam that handles the service. It has been the same since Yawcam 0.3.8.
I'm afraid that there are so many combinations of hardware and software setups, that there will always be some combination where Yawcam won't work as expected. The service mode works fine on my test machines and hopefully also for most users. It's very hard for me to guess what goes wrong on your computer and also hard to analyze remotely.
I'm also sorry to say that I don't have enough time right now to investigate this further.