Thanks to VMware Technical support on this one, thought I’d share the solution with you all.
So the issue is/was that I would create a virtual machine from a template which had the Windows 7 O/S installed on it. VMware uses the built-in sysprep for Windows 7 and Windows Server 2008 so there is no need to edit anything on the vCenter Server. I used Customization Specifications to configure the cloned machine.
Well, it appears as though at the Workgroup or Domain step of the Customization Specifications Wizard you must used the Fully Qualified Domain Name (FQDN) in the Windows Server Domain box. You also must use a <username>@fqdn (ex. email@example.com) in the Specify a user account that has permission to add a computer to the domain box.
Go here for the official VMware KB Article: Windows 2008 guest customization fails to join deployed virtual machine to Active Directory domain