No ReARM error but Sysprep didn't run. Manual ran of 'sysprep' on the command line didn't do anything, no log again.  Running of 'sysprep' without the "/quiet' option gets a "fatal error" popup.

Run "ReArm-easy.reg" ; or, manually do:
Open regedit and find the key:
 HKLM\SOFTWARE\Wow6432Node\VMWare,Inc.\Guest Cutomization\
 Change the value for “CustomizationInProgress” to “0”.
Then navigate to the following key:
 HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Session Manager
 Change the value for “BootExecute” to the default of “autocheck autochk *”, you should just delete the “sysprepDecryptor.exe” part and the enters after it. Be careful or your system won’t boot.
HKLM\Software\Microsoft\WindowsNT\CurrentVersion\SoftwareProtectionPlatform
Changed SkipRearm DWord entries to 1
HKLM\Software\Wow6432Node\Microsoft\WindowsNT\CurrentVersion\SoftwareProtectionPlatform
Changed SkipRearm DWord entries to 1
Shutdown the VM immediately. If you reboot the VM you have to do regedit again

 Do these only as last resort; if the above steps didn't work.  These steps reset the Windows to out-of-box state; causes existing applications to be back to the 'installation' state.
1. Run in command prompt : msdtc -uninstall (wait few seconds)
2. Run in command prompt : msdtc -install (wait few seconds)
3. Restart the machine
4. Edit these registry keys (yes, for 64bit):
Run "ReArm-heavy.reg"; or manually do:
HKEY_LOCAL_MACHINE\SYSTEM\Setup\Status\SysprepStatus\GeneralizationState\CleanupState:2
HKEY_LOCAL_MACHINE\SYSTEM\Setup\Status\SysprepStatus\GeneralizationState\GeneralizationState:7
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\SoftwareProtectionPlatform\SkipRearm:1
5. Create 'skiprearm.xml' file using the content shown below, save it to C:\Windows\skiprearm.xml. (If the image has no network connection for you to copy/paste the XML content,  try using freeware like ImgBurn to create an ISO file out of the XML file, then mount it to the image as a DVD.)  Run the following command from a command prompt:
c:\Windows\system32\sysprep\sysprep /generalize /unattend:c:\Windows\skiprearm.xml  
A popup appears, check the "Generalize" box, select "Enter System out-of-box experience (OOBE)" and "Reboot", click OK to run sysprep.
6. The system will reboot itself. When it comes up, answer the setup screen with, click "Next", check  "I accept the license terms", click "Start".
7. Set this registry key again:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\SoftwareProtectionPlatform\SkipRearm:1
Note: "SkipRearm" key is NOT persistent.
(The sysprep log file  c:\Windows\System32\sysprep\Panther\setupact.txt,  remove it so you don't need to scroll down so much to read the latest output.)
8. Shutdown the VM right away, do not boot it up or you will have to modify the "SkipRearm" key again.  Try cloning now.
"skiprearm.xml" content:
-----------------------------------
<?xml version="1.0" encoding="utf-8"?>
<unattend xmlns="urn:schemas-microsoft-com:unattend">
<settings pass="generalize">
<component name="Microsoft-Windows-Security-Licensing-SLC" processorArchitecture="x86" publicKeyToken="31bf3856ad364e35"
language="neutral" versionScope="nonSxS" xmlns:wcm="http://schemas.microsoft.com/WMIConfig/2002/State"
xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
<SkipRearm>1</SkipRearm>
</component>
</settings>
<cpi:offlineImage cpi:source="wim:c:/Tims/install.wim#Windows 7 ENTERPRISE" xmlns:cpi="urn:schemas-microsoft-com:cpi" />
</unattend>