Problems with windows in C++ Application after install IE 7

I have an app that performs certain functionality even if a user is not logged into the application. The functions are performed in separate threads and a dummy window is created so it can be used as the parent for windows that are popped up during this functionality.

Here is my problem: after I updated one of my machines to IE7, this functionality will only work if I am logged in and I run it manually. In debugging, the call to SetWindowPos never returned, even though the values were good. Other times, I try to circumvent the code and it fails elsewhere. I am using CreateWindow to create the dummy window and it contains a good window handle. I think the entire issue stems from the dummy window that is being created but I cannot determine what the issue might be.

Any ideas what might be causing this problem Any thoughts on what I can look at I am completely stumped, my application doesn't even use anything from IE7 but after the install (and eventual uninstall) it still has a hangup. In my testing alone, I use 2 computers, same OS, same code base, the only difference is IE 6 vs IE 7.