Hi Tammy,
Looks like we found the possible bug.
Scenario -1
Application - Prompts -> Merge Prompts "TRUE"
- Personalization works
Scenario - 2
Application - Prompts -> Merge Prompts "FALSE"
- Personalization do not work
Basically with when we do "Merge Prompt" set to "False". we are passing the Prompt input values(Copy) to other DataSources (Paste) under "Events" - 'On before Prompt Submit'.
Lets suppose for the very first time we run the application and "PERSONALIZE" the view, next time we run the application we end up with the below error.
What happened?
Set.Personalize executed before the script for Sync Variable from DS_1 to other DS.. DS.. could execute. 
Possible fix - If we have control on "Set.Personalize" like load or something like that. We can execute it as background processing after, script for sync-variable completes.
-Fahad