Just an FYI that I posted a note about how incorrect client install properties can cause ConfigMgr 2007 client registration and policy failures over on our new ConfigurationMgr blog:

http://blogs.technet.com/configurationmgr/archive/2009/01/14/configmgr-2007-client-registration-fails-and-clients-cannot-pull-any-policies.aspx

Enjoy!

J.C. Hornbeck | Manageability Knowledge Engineer