I was upgrading my lab to VMware Horizon 2012 and yes shame on me I still had an composer in my setup. It was already mentioned that VMware Composer is deprecated from the 2006 release but now in 2012 it will block your upgrade when you still have it enabled. Only after disabling composer on your vcenter the upgrade will succeed and afterwards composer will be gone as an configuration item.
See the following screenshots for detailed information:
