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Here is a similar error from a different machine:

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2011-07-01 13:57:58-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wsdscdrv.inf.resources_31bf3856ad364e35_6.1.7600.16385_en-us_6fbc043aa5345b18\WSDScDrv.dll.mui: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:58-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wudfusbcciddriver.inf.resources_31bf3856ad364e35_6.1.7600.16385_en-us_f0e901c698c4159b\WUDFUsbccidDriver.dll.mui: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:58-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wudfusbcciddriver.inf.resources_31bf3856ad364e35_6.1.7600.16385_en-us_f0e901c698c4159b\WUDFUsbccidDriver.inf_loc: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:58-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wudfusbcciddriver.inf.resources_31bf3856ad364e35_6.1.7600.16385_en-us_f0e901c698c4159b\WUDFUsbccidDriver.inf_loc: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:58-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wudfusbcciddriver.inf.resources_31bf3856ad364e35_6.1.7600.16385_en-us_f0e901c698c4159b\WUDFUsbccidDriver.dll.mui: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:58-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wudfusbcciddriver.inf_31bf3856ad364e35_6.1.7601.17514_none_648119945ff6db2d\WUDFUsbccidDriver.dll: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:58-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wudfusbcciddriver.inf_31bf3856ad364e35_6.1.7601.17514_none_648119945ff6db2d\WUDFUsbccidDriver.inf: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:58-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wudfusbcciddriver.inf_31bf3856ad364e35_6.1.7601.17514_none_648119945ff6db2d\WUDFUsbccidDriver.inf: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:58-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wudfusbcciddriver.inf_31bf3856ad364e35_6.1.7601.17514_none_648119945ff6db2d\WUDFUsbccidDriver.dll: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wwf-perfcnt_ini_31bf3856ad364e35_6.1.7600.16385_none_739abb4d5ca4ee30\PerfCounters_D.ini: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wwf-perfcnt_ini_31bf3856ad364e35_6.1.7600.16385_none_739abb4d5ca4ee30\PerfCounters_D.ini: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wwf-system.workflow.activities_31bf3856ad364e35_6.1.7601.17514_none_346d5ccdd640c664\System.Workflow.Activities.dll: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wwf-system.workflow.activities_31bf3856ad364e35_6.1.7601.17514_none_346d5ccdd640c664\System.Workflow.Activities.dll: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wwf-system.workflow.componentmodel_31bf3856ad364e35_6.1.7601.17514_none_8deb83646c57c1d5\System.Workflow.ComponentModel.dll: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wwf-system.workflow.componentmodel_31bf3856ad364e35_6.1.7601.17514_none_8deb83646c57c1d5\System.Workflow.ComponentModel.dll: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wwf-system.workflow.runtime_31bf3856ad364e35_6.1.7601.17514_none_67224784fe4912e9\System.Workflow.Runtime.dll: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_wwf-system.workflow.runtime_31bf3856ad364e35_6.1.7601.17514_none_67224784fe4912e9\System.Workflow.Runtime.dll: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_xnacc.inf.resources_31bf3856ad364e35_6.1.7600.16385_en-us_8ef6f9a790103a93\xnacc.inf_loc: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [error] Error in SetFileShortName for C:\Windows\winsxs\x86_xnacc.inf.resources_31bf3856ad364e35_6.1.7600.16385_en-us_8ef6f9a790103a93\xnacc.inf_loc: (183) Cannot create a file when that file already exists.

2011-07-01 13:57:59-0800 [warning] Unexpected size from remote for C:\Windows\øùw: expected: 20, received: 0
2011-07-01 13:57:59-0800 [info] Items processed: 165482 (19.79 GB)
2011-07-01 13:57:59-0800 [info] Items transferred: 130895 (16.69 GB)
2011-07-01 13:57:59-0800 [info] Completed successfully.
2011-07-01 22:04:33-0800 [info] K-image Client 3.3.35505 starting.
2011-07-01 22:04:40-0800 [info] Ready to copy 165482 items (19.79 GB).

edwin435, when you pulled the image initially, did you capture the boot partition as well? Usually under the notes section in the System Image Details page it shows what partitions it captured (for example: Harvested from C: D:.) You can click on Browse Files button on the System Image Details page and it will show you what partitions were captured as well.

You may need to go over this article that covers capturing/deploying Windows 7 images with a 100mb system (boot) partition:
http://www.kace.com/support/kb/index.php?action=artikel&cat=54&id=994&artlang=en

I am having a similar issue. I captured a updated win 7 image. It downloads and shows that it completed successfully but after clicking to close the window it shows cannot copy a file that already exists. I reboot the PC and get no bootmgr present. Any ideas?

edwin435, You can recreate the boot files by creating a mid level postinstall task to run the bcdboot command.

Assuming that you deployed your image to D: and your boot partition is S: the command would be
bcdboot d:\windows /s S:

More info on bcdboot is available here: http://technet.microsoft.com/en-us/library/dd744347(WS.10).aspx

I got the same error above after capture a sysprep image and also followed step in article
You may need to go over this article that covers capturing/deploying Windows 7 images with a 100mb system (boot) partition:
http://www.kace.com/support/kb/index.php?action=artikel&cat=54&id=994&artlang=en

Any idea?.
Thanks