Guest customization fails on VirtualCenter 2.5 Update 2

There is a known issue with VirtualCenter 2.5 Update 2 affecting customers who perform customizations using sysprep. 

Apparently guest customization fails wherein the virtual machine boots (and every time it reboots), the customization screen flashes briefly and the Windows login screen appears.

VMware has been quick (today) to publish a knowledgebase article on it here >> Sysprep no longer runs on template after upgrading to VirtualCenter 2.5 Update 2

This is a known issue with VirtualCenter 2.5 Update 2 and the KB article suggests it will be addressed in VirtualCenter 2.5 Update 3. A workaround is also provided.