I'm having a similar problem. I'm using WinPE 2.0 and ImageX for imaging to deploy a windows XP image. I'm preparing the drive the same way you did. Even with the bootsect command (with and without the /force) and after I restore the image (in vmware) it boots up, finishes the mini setup and blue screens the first time it tries to boot into windows with "unmountable boot volume". Under WinPE 1.6 this works. But other things I need don't work, thats why I want to go with 2.0. It seems like the diskpart command creats some kind of unsupported partition with windows xp. I've tried this on a Dell GX150 and vmware and they both fail. However it did work on a Dell D420. So something is not compatible. At this point I may have to go back to WinPE 1.6 and use ImageX but I really want to figure this out. Anybody have any free tools for creating partitions that work under WinPE 2.0?