Thanks kari. I was afraid this would be the case. But I did have some luck as it were. I continued searching on other blogs and found this:
The problem seems to be the registy entries made by sysprep, which probably should have, but didnt, change at the first reboot.
To confirm, after a clean image capture with WDS and install, upon the first reboot the system will not go past the message:
"Windows could not finish configuring the system. To attempt to resume configuration, restart the computer."
THE SOLUTION THAT WORKED
1. When the error message appears, open up a command window with SHIFT + F11
2. open the REGEDIT
3. navigate to hklm\system\setup
4. change CmdLine to blank (no value entered) (was oobe\windeploy.exe)
5. change CreateNewQueueOnFirstBoot to 0 (was 1)
6. change OOBEInProgress to 0 (was 1) (i am guessing that might be AUDITInProgress if that was your sysprep choice)
7. change SetupPhase to 0 (was 4)
8. change SetupShutdownRequired to 0 (was 1)
9. change SetupType to 0 (was 2)
10. change SystemSetupInProgress to 0 (was1)
11. exit REGEDIT and reboot
It Worked!!!! You can't believe how relieved I was and it went right to my home home screen with all my icons and background intact but at a low screen resolution. I couldn't believe it at first because I put about 7 or 8 hours into it with most of that being trying to find a solution.
I only want to point out one observation with the above process and that is item number 5 did not exist in my hklm\system\setup folder so I revised the rest and voilŕ!!
I post this solution that may work for some others here and considering it only took about 10 minutes to make the changes, it is certainly worth the try if you're still stuck.
Thanks again Kari. Your tip sheet saved me massive amounts of heart ache.
Regards,
Paul