If you're using a Windows 7 Home Edition you'll have trouble granting users the right to run services. Note this is not a problem on Professional or Ultimate Editions.
A way round it is described in the blog below - you install a Windows 2003 Resource kit and use the "ntrights" command. I've tried it and it worked - obviously subsitute service for batch and realise that this is not recommended in any way, shape or form!!
How to grant "log on as batch job" in Windows 7 Home Premium
How to Set Logon User Rights with the Ntrights.exe Utility
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