cookie_monster (16th March 2010)
Well thats just great. Spent a week setting up a nice Windows 7 image to dump onto our WDS server so we can deploy it this summer and as soon as I run sysprep I get the 'a fatal error has occured sysprep cannot continue'
No my nicely prepared 'donor' pc is useless, cannot login to the domain, cannot logon locally and I'm going to have to start all over.
Argh!
Sorry, I'm no deployment expert but I didn't think you had to sysprep a vista (thus Win7 machine) as the operating system is hardware agnostic? All you have to do is send an image to the wds using winpe.
I started this last month but got stuck so I'd be interested if you could ouline your process.
You still have to run the W7 version of sysprep (installed by default) to generalize it before you deploy it
You're right though - one image is hardware independant, this image was a generic 'classroom' image

I have found the best way to do a true hardware independent image is to do the template in a virtual machine so no dodgey drivers can stuff it up (intel :angry. You can then just snapshot it before you run sysprep for easy rollback and editing, updating etc later.
Remember you only get three syspreps with Vista/7 and yes you need to sysprep with generalize ticked to make it hardware non-specific.
cookie_monster (16th March 2010)
Actually that is not true... You can sysprep more than 3 times as long as the product is activated when you sysprep.
I never did get to the bottom of why sysprep failed, but as it scuppered the whole installation it was better to start from scratch anyway. (It was currently activated at time of sysprep)

Good catch: How Sysprep Works
I have had issues with it not generalizing properly after the third time in testing though, it started to get stuff wrong like using uniprocessor rather than multiprocessor configuration which was not helpful so I prefer to keep it to a single sysprep if possible and VMs make this easy.
I had this issue last week - you MUST run sysprep as a domain administrator so that the computer account can be removed from the domain.
I was gutted last week when this happened to me, three days of tweaking gone...

@GoldenWonder - Win 7 - sysprep fails - www.windows-noob.com this post might shed some light on its failing.
I have also had issues with sysprepping a domain joined machine, if you have logged in with any domain accounts at all they need to be completely cleared from the users folder and registry before you sysprep otherwise that user will have profile issues when logging in on an imaged machine.
I saw a few mentions about the wmp* processes but when I checked they weren't running.
I was logged in as a domain admin at the time though.
Whenever I've run sysprep, the setup machine has always been activated. After imaging I have had to re-activate every single time, it gives me 3 days to do it. Plus, yes you must be logged in as a Domain Administrator to run the sysprep correctly, unless you are installing software via the special 'Audit mode'.
my problem is it keeps stripping out intel display drivers randomly (same as vista did) same sysprep file i used previously that diddnt its annoying

It will do that by default as the intel drivers don't get stored persistently in the driver store so that they survive a sysprep. The easiest way is to integrate them into the driver store of the image after you have captured as is outlined here WDS - Graphic Drivers
When using MDT it is also trivial to add in all the required drivers to your distribution point which will also solve the issue.
If all of your systems are hardware identical then you can sysprep without generalizing which will leave the drivers as they are however you loose the ability for an image to be used easily on multiple hardware types.
Actually there is a line in the unattend file that you need to add to "Persist all device drivers install". This will solve your intel problem. Activation should happen automatically if your using the recommended KMS solution by microsoft and not trying to authenticate all machines with a MAK key.
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