VAP should find files whether processing is active or not. But it will only run VRD processes when processing is active, i.e., you have clicked the "Start Processing" button. I don't see anything suspicious in the log file, assuming "Kevria" is the account you're logging on with. Are you saying VAP didn't see a file in its Monitor folder?
How did you set this up? Did you just put a shortcut in the startup folder, or something more complex? Win7 is tricky about UAC etc. I have dim memories of playing with task scheduling and automatic startup and they are more complicated to set up than in XP. Is there a place when you set this up where you choose to start up either at startup or upon login? If so you have to choose "at login" for it to work IIRC.
I searched the old TVAP thread (TVAP was the predecessor of VAP) and here is a link that should help:
http://www.videoredo.net/msgBoard/showthread.php?p=64642
And look at the link quoted in that post too. I think you have to use the task scheduler to set this up and some quirky but critical details are in the linked post. IIRC I was able to set it up to run at login, but not just at startup (it doesn't know what account it's running in then).
There is a
-hotstart command line argument that will cause VAP to enter the processing mode (as if you clicked Start Processing) as soon as it can after starting - about 20 secs or so. If you search on hotstart in the PDF you will also see a couple other CL switches that may be of interest, including automatic shutdown after a specified run time, and auto shutdown if idle more than a certain time.