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After publishing a map service using an MXD file, the service does not start. Setting the minimum SOC process to '0' allows the service to start, but it cannot be previewed. If an MSD file is used, the service works without issue.
This has been found to occur on machines using ATI Rage XL video cards.
ArcGIS Server 10 now supports Hardware Acceleration, whereas the ATI Rage XL video card does not. ArcGIS Server does not check the installed video card and driver to see if it is compatible, and thus causes the described issue with MXD-based map services.
There are two current workarounds for this: the first is to replace the video card. Updating to a more current video card is the preferred method, as the ATI Rage XL is no longer supported by ATI or Intel and no longer receives updated drivers.
The second method is to uninstall the current video card driver and let Windows use a default/generic Plug n' Play driver. This has been tested and confirmed to allow MXD-based maps to start and preview.
The steps below are not fully supported by Esri, as 'downgrading' video card drivers may cause problems with hardware and software that are installed on the machine.