Specifying a particular user (and his password) is the preferred identity for COM servers. The reason this identity is preferred is that no one has to be logged on the machine where the server is running for the server to run, and every client talks to the same instance of the server if the server registers its class factory as multi-use. If the server has GUI, then you should not choose this identity; if you do, the user will not be able to see the user interface.
This type of server has a primary token and can access remote resources where a server that has the "launching user" identity might not be able to.
Running as a fixed user account is more secure than the interactive user identity because this identity can only be assigned to the application by someone who has the specific user's password.