From the AMVapp, make sure you installed both "pfmap-159-win.exe" and "AVFS_setup.exe" (in that order)
Yes it's supposed to make a fake .avi file in the new folder,
and I think "(null)" in the error.log means your script didn't return a video.
So, does the script itself works in virtualdub before mounting? Post your script.
Also, what editing program/version are you trying to frameserve to?
When frameserving, be sure to always add converttorgb32() at the end of your script since most programs uses RGB natively.
If ffvideosource() isn't working, try DSS2()
note: avoid using regular directshowsource() since it is not frame-accurate