Honest huh? OK. Depending on the frequency that the application will be run and the load that will be placed on the server, it might not be worth worrying about. If you are, you could always move the application to another machine and launch it using the Windows 2000 scheduler.
Security issues - this depends on two things: 1) what account is the application being launched under and 2) how is the application logging into SQL Server.
-Mike