Full credit to this post for such a great find.
http://blog.laspina.ca/ubiquitous/vmware_image_customization_in_progress
I've been noticing this error while deploying some VM's using vCenter's guest customization wizard. It kept appearing after each restart.
I had previously been using an older template that was sealed via sysprep at OS level which worked fine for the past few years. It was only when I decided to switch my template to use vCenter's guest customization did I start having this problem.
The quick and easy fix was to remove sysprepDecrypter.exe from the regkey below.
Despite this problem, I didn't seem to have a problem with new SID generation. PSGetSid was used to verify a unique SID on each new vm which seemed to work every time. On a final note, I did have a intermittent problem with the hostname not being updated to what was specified during the guest customization wizard. When this happened, I simply updated the hostname manually.
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