Icon Packager does not appear in my processes in task manager either, but it runs well for me.
Have you tried applying any of the icon packages that came standard with IconPackager? In the screenshot below, I show:
1. Where the Icon Packages are displayed within the IP config.
2. Where the apply button is.
3. Where the install IP button is.
Sometimes, you can just double click on an icon package, and it will install into the IP config. Then you just need to go to the config and press "apply icon package.'
Of course, if none of this works for you, you could always try uninstalling IP through Impulse. Then, before re-installing, make sure any anti-virus software is disabled. Anti-viruses can be pesky buggers that inhibit the proper install of some software.
Hope this helps! 
