The lsclient connects to the service (which does the actual scan) so the service needs to be running always.
The error you experiencing is a timing issue between sqlserver and the service (this will be fixed in next release)
(the service is started before the sqlserver is running) (search the forum for temporary solutions)
The config changes do not show up in the console. Is there any reason for this?
The scheduling is based on an interval time, you can use lsmanage to change the interval (wait time)
For example
CDROM = 60 means "scan cdrom info every 60 days"
Files = 0 means "scan file info every time lsclient runs"
xxx = 1 means "scan XXX every 1 day (24 hours)