I had the exact same issue. Short version, nLite didn't like my Windows XP disc. I'm not entirely sure why. Long version: I have two Windows XP Professional discs. My original disc which has no service pack, and my home made disc with SP2 slipstreamed into it. When I made an nLite disc from the latter, it resulted in a broken mess that had the aforementioned errors. I then went back to my original disc, and in nLite added SP2 along the way. It took a lot longer to crank out a disc, but you know, it actually works so who cares?
