L2TP VPN Connection fails

Your L2TP VPN Connection fails on a Client with the following error:

Error: 789 "The L2TP connection attempt failed because the security layer encountered a processing error during initial negotiations with the remote computer"

The error occurs because your client connects to the VPN Server via a NAT Device. By default you've to configure your clients to allow this type of VPN connection.

To make it work configure the following on your clients:

Windows XP
RegPath: HKLM\SYSTEM\CurrentControlSet\Services\IPSec
RegKey: AssumeUDPEncapsulationContextOnSendRule
RegType: DWORD 32 bit
RegValue: 2

Windows Vista/7
RegPath: HKLM\SYSTEM\CurrentControlSet\Services\SharedAccess\Parameters\FirewallPolicy
RegKey: IPsecThroughNAT
RegType: DWORD 32 bit
RegValue: 2

and

RegPath: HKLM\SYSTEM\CurrentControlSet\Services\PolicyAgent\
RegKey: AssumeUDPEncapsulationContextOnSendRule
RegType: DWORD 32 bit
RegValue: 2

Then reboot the Client or restart the Service IKE and AuthIP IPsec Keying Modules
(NET STOP IKEEXT && NET START IKEEXT)