As I mentioned it works fine in Linux with the same arguments. So the arguments is not the point.
The error shows that VLC cannot find the file which the macros submit to it. Would you please check how macros feature works in Windows 7.
Another issue with VLC as an external app. Now in linux. Even though VLC finishes its job in signage presentation the vlc process remains in memmory. On the next loop of timeline another VLC process starts and remains in memmory, and so on and so forth. Eventually you have a memmory overflow and the player reboots.
Please try to address all the issues I mentioned here and in my first message.
Thanks.