When you say "every other software application", can you be more specific? Does Notepad use your AMD card? Do the control panel applets? Howabout your preferred browser while surfing 2D pages like here at Beyond3D? If the application doesn't start a D3D context, the AMD card isn't likely to "kick in." As such, the Steam UI itself has no reason to fire up your 3D card, although pretty much every game it launches will do so. Those aren't parent/child processes though...
I have a switchable graphics laptop at home; it's old so the switch takes several seconds from start to finish. I've become tired of the blinking screen and waiting (even though it's only two or three seconds at most) and finally just turned the IGP off. I wager Steam would recognize the AMD card without issue...