Found this as well.
To resolve this problem, use the appropriate method:
Verify that the current domain controllers in the domain have applied security policy and the Enable computer and users accounts to be trusted for delegation user right granted to the Administrators Group (click Computer Configuration, click Windows Settings, click Security Settings, click Local Policies, and then click User Rights Assignment).
For computers that do not have this right, confirm that group policy objects in the directory service and file system have replicated, and then manually apply the policy by typing the following command:
secedit /refreshpolicy machine_policy
NOTE: Look for the following message in the application log to confirm the application of the policy:
Event ID 1704: Security Policy in the Group policy objects are applied successfully.
Stop the Netlogon service on the source domain controllers that do not have this right applied to discover another domain controller in the domain that applied this right.
Verify that the source domain controller is in the organization unit. The name of the source domain controller can be found in the hidden file called Dcpromo.log in the %Systemroot%\debug folder on the Windows 2000 server that you are trying to promote.
Open a command prompt on the source domain controller, and run the Gpresult.exe Resource Kit utility to verify that the domain controllers policy is being applied to the source domain controller.
Status
Microsoft has confirmed this to be a problem in Microsoft Windows 2000.