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I now have my PyDS desktop server running as a Windows service, thanks to these clues. This is much more convenient and 'cleaner' than the previous mechanism of starting up the server from a cmd-shell.

The best impact is that I no longer run into localhost-not-localhost because I forgot to start up PyDS.

This solution leverages the ZService.py script from the Zope distribution. Nice little gem to keep in mind for running some python as a Windows service.