Okay this is a really weird one!  When you install Service Pack 2 on Windows Server 2003 you can no longer connect using MSTSC via Terminal Services (TS)/Remote Desktop(RDP) with a 24-bit color setting.  For the customer I was working with this meant that the applications they are hosting on those servers did not look good at all over this down graded connection.  For them it meant a blocker to upgrading to SP2.  This has gotten more important recently because Service Pack 1 for Windows Server 2003 is about to be out of support.

So a hunt ensued for how to get this working.  It turns out that there was a bug in Service Pack 2 that disable some of these higher bit rates.  The bug was corrected in KB – 942610 although this was not apparent that it applied to my problem since the description was different.  However it turns out that the same underlying issue was causing both problems.  A couple of other changes needed to happen and then everything was working.  Here are the steps that I came up with to take a Win2K3 SP2 box and enable 24-bit Color Connections:

  1. Install the following hotfix - http://support.microsoft.com/kb/942610
  2. Update the following registry key to enable the fix:

    Registry subkey: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Terminal Server
    Registry entry: AllowHigherColorDepth
    Type: REG_DWORD
    Value: 1

    Note that I found the hotfix does add this registry key but it had the value set to 0 so it disabled the fix.  I had to change it to 1.  Also, typical warnings about editing the registry apply.  If you go crazy you can toast your box so back up stuff first!  For those that are sticklers here is the official warning:

    3. Important This section, method, or task contains steps that tell you how to modify the registry. However, serious problems might occur if you modify the registry incorrectly. Therefore, make sure that you follow these steps carefully. For added protection, back up the registry before you modify it. Then, you can restore the registry if a problem occurs. For more information about how to back up and restore the registry, click the following article number to view the article in the Microsoft Knowledge Base:

    322756 How to back up and restore the registry in Windows

  1. Ensure the TS box is excepting 24-bit connections
    1. Go to Start->Run
    2. Type “tscc.msc” and hit enter
    3. Click “Connections”
    4. Right click on “Rdp-tcp” and select properties
    5. Click the “Client Settings” tab
    6. Ensure that “Limit Maximum Color Depth” is set to 24-bit
  2. Restart the server to ensure everything is set.

Hope this helps!

Thanks,
Zach