>Assumption:
>2nd Exe is running, [you try to close #1 and run into an error / #1 closes because of C0000005]
>because of error the code deleting the semaphore file is not run
>result process #1 is gone, leaving the semaphore file merrily taking up disk space.

Certainly this isn't a concern. :)

>#2 duly checks the semaphore and starts to emulate the VW beetle:
> it runs and runs and runs [until you manually close or delete the semaphore]
>

I assume that Program2 can be also be closed on its own, from within itself (meaning not killed by Windows). I'd bet a bag of donuts that it can be (probably made that assumption based on another thread asking a similar question).

Maybe John can clarify, and you can claim your donuts. :)