I finally fixed it. Whew. I love Launchy, but at work I couldn’t get it to work. Well actually, at one point it did work then I messed something up, reinstalled it, but never got it to work again.
Every time I pressed alt+space nothing would happen. Ok, it would do the Windows default action but it would not bring up Launchy. I tried uninstalling, installing and reinstalling. Finally I checked out the forums and after much searching I hit upon a subject that was close enough to my problem.
Basically, kill the Launchy process (task manager), goto where the application data resides and delete the Launchy .ini file. That resets Launchy to its default settings. For XP that’s c:\Documents and Settings\%username%\Application Data\Launchy. Vista will be slightly different.
If you’ve never tried Launchy I highly recommend it.
http://launchy.net