This occurs when a Windows 7system has been sysprepped three times -- KB929828. To overcome this, you will need to do the following:

 

1) Inside the SysprepUnattend.xml file located at c:\windows\system32\sysprep, delete skiprearm=1from the section. In order to edit the Unattend.xml file, you will need toslave the HDD onto a working machine in order to have access to a text editorfor editing the file.

 

2) UnderHKEY_LOCAL_MACHINE\SYSTEM\Setup\Status\SysprepStatus\, set GeneralizationStateto 7

 

3) From an administrative commandprompt, type the following

msdtc -uninstall

msdtc -install

 

4) UnderHKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\WindowsNT\CurrentVersion\SoftwareProtectionPlatform\, change SkipRearm to 1

 

5) disconnect the ethernet cable

 

6) Rerun the sysprep

 

From <http://mickitblog.blogspot.jp/2011/08/fatal-error-occurred-while-trying-to.html>

 

 

 

KB929828.

 

An error message occurs when yourun "Sysprep /generalize" in Windows Vista or Windows 7: "Afatal error occurred while trying to Sysprep the machine"

SYMPTOMS

When you try to run the System Preparation Tool(Sysprep) in Windows Vista or Windows 7, and you use the /generalize option, you may receive thefollowing error message:

 

A fatal error occurred while trying to Sysprep the machine.

 

The Setuperr.log file may contain lines that resemble thefollowing:

Error [0x0f0082] SYSPRP LaunchDll: Failure occurred whileexecuting 'C:\Windows\System32\slc.dll, SLReArmWindows', returned error code-1073425657

Error [0x0f0070] SYSPRP RunExternalDlls: An error occurred whilerunning registry sysprep DLLs, halting sysprep execution. dwRet = -1073425657

Error [0x0f00a8] SYSPRP WinMain: Hit failure while processingsysprep generalize providers; hr = 0xc004d307

Note The Setuperr.log file is located in the\Windows\System32\Sysprep\Panther folder.

CAUSE

This error may occur if the Windows Software Licensing Rearmprogram has run more than three times in a single Windows p_w_picpath. 

RESOLUTION

To resolve this issue, you must rebuild the Windows p_w_picpath.

WORKAROUND

To work around this issue, use the <SkipRearm> setting in anXML answer file (Unattend.xml) to skip the Rearm process when you build theWindows p_w_picpath.

 

The following text is an example of an XML answer file for WindowsVista:

<settingspass="generalize">
        <componentname="Microsoft-Windows-Security-Licensing-SLC"processorArchitecture="x86"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

 

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

 

 

The below Technet article describes skipRearm tag ofMicrosoft-Windows-Security-Licensing-SLC component

 

http://technet.microsoft.com/en-us/library/cc722350(WS.10).aspx

 

 

The following text is an example of an XML answer file for Windows7:

<settingspass="generalize">
        <componentname="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>

 

 

The below Technet article describes skipRearm tag ofMicrosoft-Windows-Security-SPP component

 

http://technet.microsoft.com/en-us/library/ff716103(WS.10).aspx

MORE INFORMATION

The Windows Software Licensing Rearm program restores the Windowssystem to the original licensing state. All licensing and registry data relatedto activation is either removed or reset. Also, any grace period timers arereset.

 

To run the Rearm process in Windows Vista and Windows 7, use oneof the following methods:  

  • Run Sysprep /generalize on the     computers that are used to build the custom Windows Vista p_w_picpath.

  • Run the Slmgr.vbs script in an elevated     Command Prompt window. For example, run cscript     c:\windows\system32\slmgr.vbs –rearm.

Note Administrative credentials are required to run the Rearmprocess. The Rearm process can be run a maximum of three times in a WindowsVista p_w_picpath. For more information about the System preparation Tool, visit thefollowing link:

 

299840 How to use Sysprep with Windows Product Activation orVolume License Media to deploy Windows XP

 

From <https://support.microsoft.com/en-us/kb/929828>