Should this be a Windows Service ? ... Or maybe the System Tray Icon should be one program, and the daemon be a service.

The primary criteria of whether a program should be a service or not is: Should the program continue to run when no one is logged in?

And that boils down to one of two possibilities: a) Does it need to be running 24/7 (or, at least whenever the system is powered on) in order to fulfill its function? or b) Does it continue to perform some useful function when there is no one logged on?

(Note: Waiting dormant for someone to log on so they do not have to type 'start xxx' does not qualify!)

Also note that it perfectly possible to start and stop services from the command line on windows. See net help start and net help stop.

From what you've written, it sounds like it could justify being a service, but that it does not really benefit from the addition of the taskbar icon.

If you can justify -- because of some or all of your target audiences expectations -- to have a gui way of starting and stopping the service (in addition to the browser interface), I'd suggest that you write that as a small, standalone application (that perhaps installs itself to the taskbar when minimised if it is really going to be used frequently enough to justify that occupation of system resources). This would be completely separate from the service itself and would be (initially) started from a normal start bar icon, (or from the command line) by the user when they deem it necessary.