Installing Terminal Services in Application Mode on a Windows 2008 Member Server in a SBS 2008 Domain Succeeds with Errors

[Today’s post comes to us courtesy of Wayne McIntyre]

An issue was discovered when installing the Terminal Services role on a 2008 member server in an SBS 2008 domain. After the initial installation completes and you reboot to complete the installation you are presented with the following error.

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This occurs when the 2008 member server is misplaced into the SBSComputers organizational unit instead of in the proper SBSServers OU. This is due to a client policy linked to the SBSComputers OU which configures remote assistance and terminal server settings causing a conflict with the installation. To resolve this problem:

  1. Follow this blog post on moving your member server to the correct OU (SBSServers).
  2. Uninstall the Terminal Services role.
  3. Install the Terminal Services role.