Here's a great tip from Sebastian Gernert on sequencing on Windows Vista. If you're getting a "Can't find services.exe" error when you begin monitoring then you better take a look at those policies:
Issue: When sequencing an application on Windows Vista, after clicking Start Monitoring you may receive the following error:
Can’t find services.exe
Cause: This can occur if Group Policy on the system restricts “Debug Program” (i.e. SeDebugPrivilege) for all users, including local admins. This will prevent the Sequencer from starting since it can’t open a handle to services.exe
Resolution: You could always use something like PsExec to run the Sequencer under the system account (use the -i for interactive and -s for System account) but the easiest way is to remove the Group Policy restriction on your sequencing computer.
Personally, when I sequence I use a clean machine that's not connected to the domain so if you do this too you'll probably never see this issue.
J.C. Hornbeck | Manageability Knowledge Engineer