I'm sure that many of us have encountered this message when running sysprep /generalize "A fatal error occurred while trying to Sysprep the machine."
"But what does it mean?" you may ask... Microsoft's official word is that there is a limit of 3 rearms, poof, that's it. (http://support.microsoft.com/kb/929828) note where it says "To resolve this issue, you must rebuild the Windows image." - not the way I want to spend my weekend! You can append the skiprearm tag to your unattend.xml file, or you can just lift the limit as described below.
For Windows 7, find this key
and change the value to 1. This will allow you to keep running sysprep /generalize. Also of note, you need to do this *each time* as it's not a persistent setting.