Problems with Bitlocker preparation tool
4/29/2009
For converting an existing drive Microsoft has released a tool called the "Bitlocker Preparation Tool'. However it often fails and to quote Microsoft "This issue may occur even if the operating system is newly installed."
This error is detailed on here by Microsoft. Unfortunately this has happened three times in a row on three freshly installed systems for me. Not only is this a very poor track record, but the error is very misleading.

Microsoft says this can be caused by unmovable files such as registry, page files, or hibernation files. The suggested fixes are listed as (exact quotes):
To work around this error, use one of the following methods:
- Temporarily disable hibernation option and hard disk paging. Then, use the Windows Preinstallation Environment to delete the Hiberfil.sys file and the Pagefile.sys file. Restart the computer in Windows Vista. Then, run the BitLocker Drive Preparation Tool again.
- Reinstall Windows Vista.
Reinstall Vista? Even though this problem is known by Microsoft to occur even on freshly installed systems?
Solution
The first solution failed on all three of my systems. However if you follow these steps, and then defrag (in my case twice), the Bitlocker tool then ran properly.
Conclusion
Overall I'm quite pleased with Bitlocker, but the initial setup of Bitlocker leaves a lot to be desired. The preparation tool should have an option to run before boot up as scandisk can. In addition, there should be options to setup Bitlocker during initial installation of Windows. Windows 7 already includes some welcome Bitlocker improvements, lets hope we will continue to see more improvements to Bitlocker.
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