I keep running into this problem and wasting hours Googling for the solution, which is why I have decided to write a quick post to prevent the same from happening to others.
The symptoms are as follows: You are installing an instance of MOSS 2007, everything is going well, the account you are using is an administrator in all the places where the account should be an administrator, you get to the bit where you are going to configure the Shared Service Provider and BOOM! access denied.
You double check all privileges, farm administrators, application pool accounts etc, read well meaning advice from other users experiencing something similar, but basically you are not getting anywhere.
Then you hear the faint sound of a 10 pence coin drop (we don’t do quarters in the UK)… didn’t Microsoft introduce some security fix to prevent systems to be accessed using a name other than the machine’s hostname? This machine’s name is someserver1 while the SSP is hosted under portal.companyname.local/ssp/admin.
In order to solve the problem, apply this registry change as described in KB926642. Everything is humming along fine now.
Update: ‘SharePoint Master’ Spencer Harbar has written a good article about the reasoning behind this security feature'.