You may have encountered this issue while running a Terminal Server or Citrix XenApp Project.

The Symtoms are quite simple to illustrate : Users are facing (random) significant Logon Delays and the logon process is hanging on "Applying Registry Settings".

According to Microsoft, this can occur if most of the following conditions are met :

Multiple clients are simultaneously logging on.

The clients are sharing one large policy file or a few large policy files.

The clients are using low-bandwidth (slow) connections.

The clients have access to few domain controllers.

The clients have slow-link detection turned off for policy downloads, or the Registry.pol file is being retrieved because of an update.

I've Personnally found that Disabling Opportunistic Locking (which is one of the Shared Best Practices in Terminal Server / Citrix XenApp Environments) could be enough to Generate this issue on a Terminal server Farm.

I've also found that is issue could appear randomly and not at each logon.

While investigating of the possible cause of this issue, I've found the Microsoft KB 319440 regarding "Logon delays occur over a slow connection if opportunistic locking is not granted for the policy file in Windows".

The Related Hotfix, included in Windows 2003 Service Pack 2, adds the support of a new registry entry to deal with this problem :

Registry subkey: HKEY_LOCAL_MACHINE\Software\Microsoft\Windows NT\CurrentVersion\Winlogon
Entry: BufferPolicyReads
Type: DWORD
Value: 1

Applying this KB and adding the related Registry Entry is solving the problem and Logons are now running without a glitch not hanging anymore.