Well we kind of do what your wanting to do but not quite. We put XP Embedded images on our devices through winpe 2.0 but we don't use the vista set up. We use our own setup program that i wrote in VB6 and it formats with disk part and apply's the wim file the the local drive and boots in the the First Boot Agent of Embedded with no problem. You could guess you could do the samething with a syspreped XP image. Today i will try installing an XP Pro and sysprep it and use our setup program to see if it matters what version of XP it is. If you know VB6 its not hard to do. My program is only 88Kb and it generates a diskpart script of options you choose and then uses that smartwim.dll to apply the image to the drive. Theres no Fancy graphics in it or anything but it works like a charm.