Ran into an interesting (read: Annoying) issue at a client the other day. While deploying a fairly generic XP SP3 template with vCenter’s integrated SysPrep, the resulting machine would spiral into an endless loop of rebooting never completely finishing the SysPrep process. Hmm .. First we tried to disable the antivirus based on some suggestions on VMTN forums but that did not solve the issue. End of the day, it turned out that due to some aggressive tuning of the XP image, the Telephony service was disabled and preventing SysPrep from completing. Setting this service back to AutoStart and the reboot went away. Not entirely sure why a disabled Telephony service would prevent SysPrep from finishing but glad the issue was solved.