One of the most common issues with MDT 2008 / BDD 2007, LiteTouch and ZeroTouch, is leftover junk from a previous installation preventing a second installation to continue... The solution... Get rid of the junk...

Note: Make sure to do these changes only to the winpe images used for bare metal installations... (wiping the disk in the middle of a refresh installation might lead to , ehh, unexpected, results)

LiteTouch
Create a script that removes the MININT and _SMSTaskSequence folders (if present).

CleanSetupInProgress.cmd

If Exist C:\MININT\nul rd C:\MININT /s /q
If Exist C:\_SMSTaskSequence\nul rd C:\_SMSTaskSequence /s /q

Call the script from unattend.xml (in WInPE 2.1)

Unattend.xml

<?xml version="1.0" encoding="utf-8"?>
<unattend xmlns="urn:schemas-microsoft-com:unattend">
    <settings pass="windowsPE">
        <component name="Microsoft-Windows-Setup" processorArchitecture="x86" publicKeyToken="31bf3856ad364e35" language="neutral" versionScope="nonSxS" xmlns:wcm="http://schemas.microsoft.com/WMIConfig/2002/State">
            <Display>
                <ColorDepth>16</ColorDepth>
                <HorizontalResolution>1024</HorizontalResolution>
                <RefreshRate>60</RefreshRate>
                <VerticalResolution>768</VerticalResolution>
            </Display>
            <RunSynchronous>
                <RunSynchronousCommand wcm:action="add">
                    <Description>Lite Touch PE</Description>
                    <Order>1</Order>
                    <Path>cmd /c CleanSetupInProgress.cmd</Path>
                </RunSynchronousCommand>
                <RunSynchronousCommand wcm:action="add">
                    <Description>Lite Touch PE</Description>
                    <Order>2</Order>
                    <Path>wscript.exe X:\Deploy\Scripts\LiteTouch.wsf</Path>
                </RunSynchronousCommand>
            </RunSynchronous>
            <Restart>Restart</Restart>
        </component>
    </settings>
</unattend>

ZeroTouch (SMS 2003 OSD FP)
Just add a winbom.ini that will wipe and format the disk... se below example...

winbom.ini

[Factory]
WinBOMType=WinPE
Reseal=No
[WinPE]
Quiet=Yes
Restart=No
[PnPDriverUpdate]
[PnPDrivers]
[NetCards]
[UpdateInis]
[FactoryRunOnce]
[Branding]
[AppPreInstall]

[DiskConfig]
Disk1 = Disk1.Config

[Disk1.Config]
WipeDisk = Yes
Size1 = *
PartitionType1 = Primary
FileSystem1 = NTFS
QuickFormat1 = Yes
SetActive1 = Yes