As documented in the installation instructions, the special User Rights that must be assigned to the account you will use to run WinAppxD must be assigned on the member server itself. One way to do this is to sit down in front of THAT SERVER's keyboard and login to the server as the local Administrator, run the "User Manager for Domains" utility, and when you "Select Domain" to administer, type in THE NAME OF THE MEMBER SERVER (not a domain name at all... the _machine_ name... honest!). This connects you to the account database specific to that server. From there, set the User Rights as you would normally.
The extra work is required because of NT security mechanisms. Most NT wizards will not think this is necessary. However, straight from Tier 3 MS phone support, it really is. Setting the rights without connecting to the specific machine will only work if you are running WinAppxD on a PDC or BDC.
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