SOLVED!
I seems that NCH conducts poor testing on their software before releasing a new version.
Each scheduled task is saved in a ".dat" suffix text file in C:\Documents and Settings\{user}\Application Data\NCH Software\Debut\ScheduleTasks.
Opening the file with notepad reveals the scheduled task data.
The first parameter in the file is "VideoDevice". For screen it should be 1, and for capture device it should be 2.
The software however set it to 3 which is probably illegal value, causing the recording to revert to the default recording source (screen).
Editing this file can also solve another NCH bug.
Currently a recording that starts before midnight and ends after midnight cannot be scheduled because the software detects it as end time earlier than start time.
By editing the EndTime parameter in the file any time can be set (the time data is in seconds).
YDD