As a service to others (and myself), I'm keeping track of ASP.Net issues I've run across that I had to hunt down the answer for.
"Based on security changes implemented in MS05-051, Read level NTFS file system permission is required to the %windir%\registration folder. Default permissions include Read access for the Everyone group. If this configuration is changed, applications and services may exhibit unexpected behavior. Organizations that have chosen to implement more restrictive NTFS security permissions should consider granting Read level permissions through group membership for users, applications, and services that require access to COM functionality. "