Since setting up my workstation as the only windows7 client on our network I have been able to play around and setup redirection for myself and profiles to make sure things work correctly for next years windows7 rollout. So far so good and I have been using this for a few months now, I have previously ran windows updates from the microsoft update service website and always installed all major updates and most optional ones but last week I decided to setup WSUS on our network and deploy updates, along with one of the approved updates for my workstation was windows 7 service pack 1 which I would assume would of been picked up by the computer in previous updates but it doesn't look like it.
Anyway I went to use my machine yesterday morning and I could not logon, left the computer on the welcome screen logging in to my roaming profile account for over 10mins, nothing still so I rebooted and checked the events log which had the usual known issue
"The winlogon notification subscriber took 264 second(s) to handle the notification event (Logon)"
"The winlogon notification subscriber is taking long time to handle the notification event (Logon)."
If I uninstall SP1 I'm able to logon fine, I have tryed this again today with the same result, unable to logon until SP1 is removed.
I had this with a Windows 7 PC, though that got stuck on the SP1 update and wouldn't install it. I imaged that one to fix it, but that's tricky with your own workstation unless it's blank anyway. When rolling fresh images now, I use the Windows 7 with SP1 .iso from the VLSC, this works fine every time.
we have had this issue both with pre SP1. then it seemed to go away with SP1 only to come back a few months later. Try KB2617858 our support company recommended and so far has worked. Also do your users have solid colour backgrounds?
I have to agree, download the Windows 7 SP1 ISO. Windows 7 SP1 is absolutely massive, weighing in at 903MB (x64) and 537MB (x86), so make sure you have it installed before taking a snapshot for imaging!