You can not use %WINDIR% in sysprep.inf with SCCM 2007

The default “Setup Windows and ConfigMgr” SCCM action will effectively replace all variables in sysprep.inf

And since that action is run under WinPE, the %WINDIR% variable will be replaced with X:\Windows.

So never, ever use that variable in sysprep.inf… (unless you really deploy Windows to X: which I highly doubt  🙂  )

This is by design….