Had this happen to me a couple of times when trying to set up farms with least privileges so it’s nice and secure.  Turns out I locked it down a bit too much, rather than giving local admin to the Farm Account, here’s what you do:

  • Grant WSS_WPG read permissions to: HKEY_LOCAL_MACHINE\SOFTWARE\MICROSOFT\Office Server\12.0
  • Grant WSS_ADMIN_WPG Full permissions to the registry key : HKEY_LOCAL_MACHINE\SOFTWARE\MICROSOFT\Office Server\12.0
  • Reboot server