I have yet to encounter this one. http://social.answers.microsoft.com/Forums/en-US/vistawu/thread/0e070954-c537-459e-a3d8-908be71e63d8 and many other posts don't seem to tell us how people create this issue. My guess is malware, service tinkering or other.
I am the Administrator for "my" home computer.
I am unable to turn on my diagnostic policy service and there fore unable to diagnose faults or problems within my computer.
It started when I made an attempt to secure my Linksys wireless router. I re-reinstalled the Linksys program and with each attempt became further mired into conflict issues.
I then restored my computer back 2 x weeks.
When troubleshooting this and other programs, I was informed the Diagnostic Policy Service was not running and therefore unable to continue.
When attempting to start the Service in Windows Task Manager, a dialoge box indicated that access was denied.