Powershell: Pass parameter by name toa com object function

Are you trying to actually run this when you're not logged on? If so, I'd point you at this Microsoft KB article for some likely causes: Considerations for server-side Automation of Office. The title says server-side but the article also specifies this applies to client versions of Windows not running in the interactive session with a loaded user profile.

If you do want this to run this without a user being logged on (with the option you describe, it sounds like you do), ultimately I'm not sure you're going to be able to fix your problem for the reasons described in the article. If you only need it to run when you're logged on, just don't choose that option?

The $arg[] array appears to lose scope inside the ForEach-Object.

function foo($arg1, $arg2)
{
  echo $arg1
  echo $arg2.FullName
}

echo "0: $($args[0])"
echo "1: $($args[1])"
$zero = $args[0]
$one = $args[1]
$items = get-childitem $args[1] 
$items | foreach-object {
    echo "inner 0: $($zero)"
    echo "inner 1: $($one)"
}