Worked on Windows Server 2012 R2:

http://social.technet.microsoft.com/Forums/windows/en-US/425bd101-8a87-488c-b2e2-9f2f8113a0d9/sysprep-fatal-error-occurred-while-trying-to-sysprep-the-machine?forum=w7itproinstall

Don't 'Generalize'.

See also: 'Microsoft-Windows-Pnpsysprep'

Error: “Your grace period limit has been reached and will not be reset”

In Windows XP Professional, Sysprep can reset Windows Product Activation a maximum of three times.

This causes a problem when deploying the image on other pc's as the image is redundant after 30 days of it being created.

e.g. create image on 1st sept - can deploy on other PCs in sept but when deploy the image on a pc in Oct it has expired and wont let me log on.

There is a solution buried in Microsoft KB308554:

1. Update your master system with applications and patches.
2. Run sysprep -factory and reboot.
3. Activate Windows.
4. Run sysprep -reseal -activated. No error message about the grace period appears this time!
5. Use the prepped system's drive as your fresh master image for deployment.

A fatal error occurred while trying to sysprep the machine

Error: Sysprep was probably run more than 3 times on the machine.

To show:

slmgr /dlv

Generally speaking, to sysprep the image on a single computer for multiple times, you need to configure the Microsoft-Windows-Security-SPP | SkipRearm to 1 in the unattend.xml file.

In Registry Editor

HKEY_LOCAL_MACHINE\SYSTEM\Setup\Status\SysprepStatus\GeneralizationState = 7

Then run sysprep again.

If the same issue still persists, please uninstall the MSDTC and re-install it

To uninstall MSDTC:

msdtc -uninstall

To reinstall MSDTC:

msdtc -install