mmarable, your issue is not at all related to WinPE - so relax and be comfortable! First, for $OEM$ to work in your case, it should be placed *INSIDE* the i386 folder. the OEM folder is placed beside i386 only when booting from CD. Second, your issue of having to change the CD might be because txtsetup.sif is not having the correct value for "SetupSourcePath". Open up that file and see if that line simply has "\" as the value. Lastly, you are over-complicating your install. There's no need to make it quite as complex.... Your "XP setup" starting scripts and the copying over of files to HDD thru batch-files sounds too round-about for starting out. Keep it simple, then when all is fine and you get the confidence that you can trouble-shoot minor problems by yourself, raise the complexity level.