It looks like the signing is actually performed with an Acrobat's 3rd-party plugin that [possibly] handles a smart card. If this is the case the error is usually indicative that either this plugin does not support some operation that Acrobat needs or that it wants to perform some operations that Windows does not support. Do you know whether the signing with the same signing certificate (the same smart card/plugin) succeeds on another machine?
In this case the troublesome certificate is a soft certificate. I am able to sign documents using Acrobat Standard Xi using either my soft certificate like the troublesome one above or my HSPD-12 smart card.
I am looking for something that might provide additional information as to the cause of the problem.
I have solved my problem. In this case I am using Entrust ESP 9.2 on my Windows 7 computer. ESP=Entelligence Security Provider. I applied Entrust ESP Service Pack 1 to the ESP 9.2 product and my problem went away.
ESP installs a Cryptographic Service Provider into Windows.