AutoIT relies on dialogs being displayed in order to work correctly. Deployment using service based installers that use the system account will usually fail as there are no dialogs presented in a way that AutoIT can work with.
Eshwar originally wrote the above script for us (he is on my team actually!), and we're running it as SYSTEM (via the Altiris Agent) and it is working fine. The trick is that in the Altiris Program configuration for the package, you check the "User interaction required"; this seems to load more of the SYSTEM account's "user" environment and allows it to be visible, at least that's what I'm going with for now...:)