hi, doubt anyone will need this but the cause here was Daemon Tools 4.30.4 being loaded on the master image.
Resolution was to change the SPTD device startup to 2 from winPE to allow sysprep to complete, then revert to the original value. From: Adam Meixler Sent: Friday, August 14, 2009 11:53 AM To: NT System Admin Issues Subject: Windows 7 Sysprep'd image fails restart Hi, I just wrapped up a Windows 7 RTM build and used sysprep /shutdown /oobe /generalize to prep the machine to be WIM'd. Everything went fine until the machine was brought online afterwards to complete its setup. The machine (and all machines that have been deployed to) stops with an error "Windows could not finish configuring the system". Google hasn't turned up anything really useful aside from, kill wmpntrk.exe during sysprep or rebuild and try again. Is there any way to troubleshoot what is going wrong? (shift-f10 does get a cmd prompt) Thanks! ~ Finally, powerful endpoint security that ISN'T a resource hog! ~ ~ <http://www.sunbeltsoftware.com/Business/VIPRE-Enterprise/> ~
