David,

to me this looks like security permissions make it impossible for the CGI module to communicate with the FWServer.EXE. I've never found out what technology FoxWeb uses for communication, whether that's shared memory, named pipes, files or COM. I suspect that 1.x is using shared memory combined with a semaphore. Both of which can have permissions and might be bound to the user or the Window station.

Process Explorer and Process Monitor from SysInternals should display which of these is used and whether there's an access denied error message coming up.