After upgrade to VC 2.5u2 I ran into some problems with my templates. When cloning XP guests, I noticed that they would not run the sysprep after first boot. I had to first manually login and then they would start or after waiting a really long time without login.

Today I found a VMware KB article, that might do the trick. Haven’t had time to test it yet, but if you are suffering the same issues, it might be worth looking at.

http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=1006848

by Gabe