I recently had an issue during an install of a Windows Media Center Extender. The install may have failed do to the install being interrupted by a power outage and it seems like some files may have been corrupted on the MC PC.

I was receiving the error:

An error was encountered while configuring your computer for use with this extender

when I entered the 1234-5678 type code in the PC to add the extender. In the Event Viewer there was event 523 with the details “Media Center Extender Setup failed at step 120.” The error was -2147467259.

I found a post that cleared up the problem by following the steps below:

Go to C:\windows\system32\grouppolicy and delete the contents of the folder (including the directories).
You will need to untick Hide Protected Operating System Files and select Show Hidden Files and Folders before you browse.

I have windows 7 pro and an Xbox 360.

Hope this helps, and use the advice at your own risk, but it just worked for me. I copied the files elsewhere just in case before I deleted them, but didn’t need to do anything with them, as they were regenerated when I added the extender.