Unable to sysprep the machine, hr=80004005

When you try to Capture Windows 7 using SCCM "Capturing Only" Task Sequence in C:\Windows\SysWOW64\CCM\Logs\SMSTSlog\smsts.log file you get these errors:

*******************************************
Sysprep did not complete successfully
Unable to sysprep the machine, hr=80004005
Sysprep'ing the machine failed, hr=80004005
*******************************************


This error can be caused by over sysprep-ing your reference machine.

Sysprep allows one machine to be sysreped 3 times.

How many times your machine is syspreped you can check out with this command:

slmgr.vbs /dlv


By default: Remaining Windows rearm count is 3.

To skip rearm process you can use this XML code that can be added to your unattend.xml file:

*settings pass="generalize">
*component name="Microsoft-Windows-Security-SPP" processorArchitecture="amd64" publicKeyToken="31bf3856ad364e35" language="neutral" versionScope="nonSxS" xmlns:wcm="http://schemas.microsoft.com/WMIConfig/2002/State" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
*SkipRearm>1*/SkipRearm>
*/component>
*/settings>

Note: At the begin of each line replace "*" with "<"

Here is the MS article related to this issue: http://support.microsoft.com/kb/929828

Note

You must make sure that the "SkipRearm" setting is removed from the final unattended file that is used to deploy computers in a production environment. If is not removed from the unattended file that is used to deploy computers in a production environment, the KMS current client count does not increase for new clients that are added to the network.