When attempting an in-place upgrade or an upgrade from a previous version of Windows, you may see the COMPATABILITY REPORT error stating:

Windows needs to be restarted so necessary changes to system files can be made before continuing.

After restarting this alert flag may not be cleared.  Fortunately there are two simple solutions:

  1. Uninstall Nero DVD / CD burning software as this is a known issue
  2. Delete any pending operations in:
    HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager
    like:

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