Has this issue been fixed?

I think that the problem just back with 1.2.1

pppx00, do you have Ati Video card?

There is also the rare instance where this can happen in relation to VNC. It's strange and rare. I don't think anyone has ever managed to pin doing exactly what causes this behavior.

Someone said that it's only when ATI Hotkey pooler is disabled.

yes nuhi, but I'm using the OmegaDrivers, without Catalyst Control Center.

So you do have the Ati card, it must be it. Omega drivers are custom drivers, they probably removed the Hotkey pooler? Anyway, if you're interested in confirming then install full drivers and try it.

I have nvidia cards, and it still happens to me with 1.2.1

There some issues when you use a none slipstreams sp2 source as I have seen. I have the ability to use both a slipstreamed and none slipstreamed source of SP2 and amazingly I have less issues with the slipstreamed source then I do with the none one but ONLY with nlite 1.2.1.

1.0.1 reacts the same to both soures. I hope this helps nuhi.