It appears I was a one version behind the current release of VirtuaWin (4.3) and more fuzzy then I thought installing/configuring LBC.
The current version of VirtuaWin doesn't seem to make much difference, but using (or not using) appropriate VW rules does. I have been running Rocket Dock for awhile without problems. I check and there was no special rule for it. So no rules works better for LBC.
LBC is still crashing with auto-hide on. The error is Access violation at 0x004c4397 location: 0x00000004.
I haven't had the time for anal retentive testing mode, but associating the crash is reasonably certain.
I understand now that when LBC has an episode the .mcf file is OK. Its a .ini file that gets whacked. Not much of a problem/issue recovering from that.
The screen shots on the LBC page make more sense to me now. I believe there is sufficient flexibility laying out Docks for my purposes. Including them as annotated uses cases in the documentation might be useful to newbies.
VirtuaWin isn't hiding LBC's button in the taskbar. Its not the only application either. I've looked at this issue recently. It may be due to the TOOLWIN property somehow getting clobbered. It seems appropriate to raise this issue with the author of VirtuaWin.