Application fails to launch on a XenApp Server 2008 R2 with Profile Unity 4.7 being installed. Launching a published application causes the application to fail to launch displaying the following error:
“The Citrix server is unable to process your request to start this published application at this time.”

Caution! Refer to the Disclaimer at the end of this article before using Registry Editor.

Change the registry setting that had been altered by the Profile Unity application back to the original path to the systems userinit.exe. 
The registry key location is: HKLM\Software\Microsoft\WindowsNT\Winlogon\userinit. Change the path back to C:\windows\system32\userinit.exe.

Problem Cause

Profile Unity is a profile management solution for virtual desktop deployments and physical PCs. Profile Unity decouples user profiles and data from the operating system for migration to VMware View, Citrix XenDesktop, or any platform that supports Windows OS.

Version 4.7 uses a proprietary userinit.exe that changes the registry key and modifies the original path to the operating systems userinit.exe causing applications to fail to launch. The traditional userinit.exe file can be seen from a Process Monitor trace on a XenApp server with no Profile Unity installed.

If Profile Unity is installed, the icon is different (refer following screen shot), and the provider states Liquid Labs Inc.

Since Profile Unity has changed the traditional userinit.exe, the process does not read the location in the registry for the AppSetup key causing core processes to not start like Cmstart.exe, CtxHide.exe, and UsrLogon.cmd.