NQkeygenWindows fails to import security key file. (NETIQKB54738)

Error: 'NQkeyGenwindows.exe has generated errors and will be closed by Windows. You will need to restart the program. An error log is being created.' When using the NQKeygenWindows manually

As FAT32 file system does not allow file-level permissions or security which is required in order to use encryption the above error is generated.  In order to resolve this issue convert the target machine's file system to NTFS. 

This error is caused if the file system on the local agent is formatted with FAT32. FAT32 does not support file-level permissions.  Using Encrypted communications requires at least READ permissions to the followig directory: 

C:\Documents and Settings\All Users\Application Data\Microsoft\Crypto\RSA\MachineKey.

Formerly known as NETIQKB54738