Thank you for confirming my guess: you want to create some UI to show progress in the service operation. As Ron correctly pointed out in his Solution 1, you cannot have UI in your service application, as it is non-interactive, but quite a good reason: when a user logs off, your service application still works, but there is no a desktop.
Here is a typical solution: you develop a separate application with UI. Typically, you would need to start it up when some user logs on. The a simplest way to do that is to put a link file in the "Startup" directory for all users. Another approach it to prescribe a path to this application is Registry under the key "Run". Please see:
http://msdn.microsoft.com/en-us/library/aa376977%28v=vs.85%29.aspx[
^].
You can do this in your service installation (and should not forget to uninstall when uninstalling it).
Now, when the UI application starts, it should connect with your service application and start exchanging data and events. As both applications are on the same computer, using
named pipes would be enough:
http://en.wikipedia.org/wiki/Named_pipes[
^],
http://msdn.microsoft.com/en-us/library/windows/desktop/aa365799%28v=vs.85%29.aspx[
^].
If can also be MSMQ or other messaging facility, and a lot more.
—SA