Thanks for your help Rick, Jim and Tim.

The problem is certainly that the command 'REPORT FORM' inherently has a UI, the popup dialog for starters which counts the no. of pages spooled. It might interest you to know that the same behaviour is encountered when we treat VFP as an OLE server from within VB. Namely,

Dim oVFP as Object
Set oVFP = CreateObject(VisualFoxpro.Application)
oVFP.DoCmd("REPORT FORM 'myReport' TO PRINT")

An identical error message is received.

The happy news is that it works fine as an OutOfProcess EXE.