The fate of an accepted paper not being presented If no author of an accepted paper registers for the conference, the paper is simply dumped from the conference.

If, however, the authors duly register but fail to present it at the conference, what is the fate of the paper? I have an accepted paper at a European conference (IEEE), but due to lack of travel funds, our team has decided that we will not be travelling to present the work (I am not based at Europe). 

I wrote to the General Chair of the conference, and he writes to me that if the paper is not presented, it will not be indexed in the IEEE Xplore library. 

What I wish to know is, will the paper still be published in the 'Conference Proceedings' booklet or CD? My guess is Yes, since these must be printed before authors arrive for the conference. The General Chair has not responded with an answer on this. 

Question two, which happens to be my real inquiry- does such a thing count as a valid 'publication' for me? Will my work get indexed somewhere (wherever it might be) or not, would it be searchable via the Internet or not?
This has actually happened to me a couple of times in the past. This really depends on the policy of the organizing professional group (ACM/IEEE) and even within sub-groups of that body (SIGWEB/SIGCHI within ACM)

Generally, I have found that if your paper is accepted in a conference and you or any of your co-authors register for that conference, then the paper will still be published in the conference proceedings and indexed in the relevant digital library. e.g. IEEE Xplore, ACM Digital Library etc.

If you or a co-author do not register for the conference, then your paper, in general, will not be indexed. 

If an accepted paper is not published in the conference proceedings (and by extension not indexed in the appropriate digital library), then it generally does not "count" as a valid publication. You are better off, in that case, by withdrawing your paper and submitting it at a more acceptable conference venue (or a journal where there is not travelling involved)  

PS: You can always link to such a paper on your personal website or put it on arxiv for comments. Google Scholar will obviously index it but such indexing has limited practical value.