Issue: When attempting to create a new virtual machine from a template in System Center Virtual Machine Manager 2008, the process may fail during step 1.6.5 with the following error that shows up on
the new VM after a reboot:
Windows could not parse or process the unattend answer file for pass. The settings specified in the answer files cannot be applied. The error was detected while processing settings for component [microsoft-windows-shell-setup]"
No errors show up in the SCVMM console for that job unless you cancel the job. Then you will see a generic 12700 error.
Also of note is that the VM will reboot repeatedly unless the job is cancelled.
Cause: In this case, the Administrator password had not been set to blank and the password complexity policy had not been disabled.
Resolution: For SysPrep to succeed, the admin password must be blanked out on the Source VM that was used to create the template. Unfortunately there’s no way to fix this after the fact but to prevent it from happening in the future be sure to clone the VHD (always a good practice!) and then make sure you follow the steps in the following article:
Michelle Foley | Senior Support Escalation Engineer