Newly created pooled win 7 VDI requires a reboot when accessed

I am readying my pre-production 2012 environment to deploy a pool of virtual desktops (windows 7) to my thin clients. I have read the documents on how to create a managed pool and the process seems to work fine. It reads my template and creates the pooled virtual desktop collection. However when I connect to one of the collection members, Windows displays “You must restart your computer to apply these changes”. If I click yes, I’m logged off and I can see the virtual revert.

These are the steps I’m following;

1. Create a Windows 7 virtual machine in Hyper-V (with SP1)
2. Update the integration services
3. Sysprep it (generalize, oobe ,shutdown)
4. On the Connection Broker machine (using the Collection Wizard)
   1. Create a Collection
   2. Select the Pooled type
   3. Select my newly created sysprep’d Win7 Template
   4. Provide the unattended settings interactively (Time Zone and OU)
   5. Specify users
   6. Select Desktop Allocation
   7. Select Storage
   8. Skip user profile
   9. Confirm and create
5. The process takes off and the virtuals are created, they are in the domain and placed in the correct OU. However when I log into one It’s telling me a reboot is pending.

Did I miss a step?