I've created a virtual application using ZAV 8.03. The application is called Seterra, a simple freeware application to teach geography. My idea was to deploy it in a ZenWorks bundle using SpoonReg.exe to register shortcuts, set up sandboxes etc. The virtual application works fine if I manually run it (doubleclick it) and it install fine if I run SpoonReg.exe from a command prompt as follows:

\\path\to\sponreg.exe /allusers \\path\to\virtual\application.exe

It then successfully installs Seterra for all users and creates the shortcuts for the applications. The application also launches without any problems.

However, if I try to run the above command in a ZenWorks bundle (using the System account) the application SpoonReg.exe hangs and when I forcibly kill the process I get the following error SpoonReg.exe exited with error code 1. I've verified that the System account has sufficient NTFS permissions for the installation files. I also get the same problem if I try to install the virtual application locally (i.e. all files on the local harddrive). I'm running this on 64-bit Windows 7.

Any ideas what might be causing this issue?