I have two users experiencing this same problem and both had a very similar histories.
First both recomputers had to be rebuilt after they had been added to the ePO server.
After they were reimaged the McAfee agent and endpoint encryption were installed and activated.
After almost a month later they started getting the "Fatal Error: [0xEE000007] Internal initialization error" at startup when it asks for a username.
This is the log in MfeEpe.log:
2012-09-27 21:11:10,654 INFO EpoPlugin enforcePolicy: new policy store created (session 1348689477).
2012-09-27 21:11:11,060 INFO EpoPlugin enforcePolicy: Waiting for OptIn users (i.e. non-default UBP users) before enforcing policy.
2012-09-27 21:11:11,091 INFO EpoState == Start of policy enforcement ==
2012-09-27 21:11:11,091 INFO EpoPlugin enforceUserPolicy: Dispatching enforce policy event.
2012-09-27 21:11:11,091 INFO EpoPlugin policyHandler: handling EnforcePolicy event
2012-09-27 21:11:11,091 INFO MfeEpeStatusService Policy enforcement has started
2012-09-27 21:11:11,262 INFO EpoPlugin userHandler: handling AddLocalDomainUsers event
2012-09-27 21:11:11,325 INFO DomainUsers Didn't find any new local domain users.
2012-09-27 21:11:11,325 INFO EpoPlugin userHandler: handling AddLocalDomainUsers response
2012-09-27 21:11:11,372 INFO EpoPlugin userHandler: checking for machine ID/ePO server change.
2012-09-27 21:11:11,387 INFO EpoPlugin userHandler: processing user updates/requests
2012-09-27 21:11:11,746 WARNING MfeEpeGenEncryptionProviderPlugin ..\..\..\Src\EpeGenUserHandler.cpp: EPE_gen_user_handler::get_updated_users: 353: [0xEE000007] Failed to create user file index object
2012-09-27 21:11:11,746 INFO EpoPlugin epoAudit: dispatching audits to AgentHandler
2012-09-27 21:11:11,824 ERROR EpoPlugin userHandler: failed to perform user updates: [0xEE010002] [0xEE000007] Failed to create user file index object
2012-09-27 21:11:11,824 INFO EpoState == End of policy enforcement ==
2012-09-27 21:11:11,824 ERROR MfeEpeStatusService Failed to process a batch of user data received
2012-09-27 21:11:11,824 INFO MfeEpeStatusService Policy enforcement has completed
2012-09-27 21:11:12,089 ERROR MfeEpeGenEncryptionProviderPlugin [0xEE000007] Failed to create user file index object
In both cases the machine names appeared twice in ePO.
Any help would be appreciated.