TheTaintedOne, yes you should definitely be concerned about this error! You should get no errors running nLite or installing. Where did your source come from? Is it legal with a valid key? Has any other program been used to precess it before nLite? Did you run nLite more than once against it? You should always start with a fresh copy of your CD files/folders and run nLite only once doing all your work. Enjoy, John. Hi, The source is legal and valid. The XP directory is directly created by unpacking the iso and no other program has been used to process it before nLite, and I always start with a fresh copy, each time I run nLite on it. In previous testings, I had added hotfixes for IE8 and and Window Media Player without properly integrating them, so I got into the usual "Setup constantly restarting" and the "Setup hang with OOBE splash screen" problem. I have since removed those hotfixes since I don't use IE8 or WMP anyway, and that is when this error dialog started appearing. I have managed to install the streamlined copy in a virtual machine, everything seems fine so far, except that I can't seem to invoke the System Restore GUI, and an empty folder appeared in Control Panel. Any ideas?