Windows 7 OK button on Copy To dialog doesn't copy profile

So I am attempting to copy a User Profile to the default profile. I am using WinSpy++ to enable the disabled "Copy To" button - this process works on a stock laptop I have here.

However, this does not work in a customised image I have with a fair amount of registry settings changed and policies applied. Additionally, I should be able to copy the default profile over another profile regardless, but I cannot.

The Application Event log lists this:

Error Instrument: ProcessName: systempropertiesadvanced.exe 
WindowTitle: Copy To  MsgCaption: Confirm Copy  MsgText:
C:\Users\username\Desktop\test already exists. The current contents of this
directory or this file will be deleted during this operation.  Are you
sure you want to continue? 
CallerModuleName: unknown  
BaseAddr: 0XFFFFFFFF        ImageSize: 0XFFFFFFFF         ReturnAddr: 0X00000001

It is the contents of the popup that should show up when I click OK on the copy to dialog... before the profile copy is actually performed.

I intend to diff the registry settings between a known working system and this system... but it is a lot to wade through.

Additionally... The image it does not work on is a Windows Standard Embedded 7 install and after testing it doesn't work even with a mostly clean install so it could be something missing from the installation. I also noticed there are other pop up type messages not displaying (I noticed them in the event logs)

The Event ID is 1072

EnableDefaultReply for MessageBoxes was set in the registry.

Details here (Just search for EnableDefaultReply if the link goes dead): http://msdn.microsoft.com/en-us/library/ms940850(v=WinEmbedded.5).aspx

1. In the HKLM\System\CurrentControlSet\Control registry key, create a new key named Error Message Instrument.

2. Under the Error Message Instrument key, add the values of type REG_DWORD from the following table.

EnableDefaultReply 0x00000001 Enables the Enable Default Reply feature.

This cuases windows to auto reply to messageboxes... and meaning it was auto canceling my profile copy.