We ran into this same problem using the desktop manager after we started deploying XP SP2. No matter what we did, we absolutely could NOT get the desktop software to install on our corporate laptop image if SP2 was installed. The only solution was to UNinstall XP SP2, install the desktop software, then re-install SP2. Not a lot of fun, and perhaps not even related to the poster's problem, but I thought I would mention it.