If you set the advertisement to “Stream virtual applications from distribution point” then it would fail, but if you set the advertisement to “Download content from distribution point and run locally” then everything worked just fine.  When the application failed it would generate a 0A-400000C8 error similar to the one below:

We can seen that error if we have a proxy configured that is interfering with the streaming of the package.  Since streaming uses HTTP and downloading does not, this is why one worked and the other didn’t. 

Sure enough, Tom tried disabling the proxy and it worked.  Mr. Tom Torggler later went on and found more details as to why this was failing with his proxy server and since this particular error wasn't documented on the Internet anywhere he decided to write up a great blog post explaining the issue and what he eventually found.

If you happen to run into this 0A-400000C8 error then check out what Tom did, and check out your proxy. 

To see and read all the details of Tom's post see the following link:

AppV 4.6–SCCM 2007R2–Streaming Issue