Yes, I've come across this exact same problem across a wide range of different hardware/NIC types. My organisation uses a PXE (network) boot setup, but the principle is exactly the same as using a CD with winnt.sif. Having had a look at the setup logs of a few machines that have failed, it seems to be that Windows Setup tries to join a workgroup or domain with a duplicate name (COMPUTERNAME in our case). Windows setup doesn't like this, then tries to create a random name instead (like sysprep does), it's at this point that it reboots and ends up in an endless cycle. The simple workaround seems to be to ensure that winnt.sif makes reference to a unique name on the network. It does seem to be a bug in the new SP2 setup procedure - I haven't yet come across anything from MS that reports anything similar though. HTH