Hello Guy,
two possible causes that I have seen for this.
1) Make sure the server service is running.
2) Make sure you have the correct updated version of Sysprep, at least SP2
Thanks,
Darrell Gorter[MSFT]

This posting is provided "AS IS" with no warranties, and confers no rights
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<Thread-Topic: Incompatibility between this tool and the current operating
system
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<Subject: Incompatibility between this tool and the current operating system
<Date: Wed, 30 Aug 2006 12:45:02 -0700
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<Hi,
<
<I'm trying to run sysprep 2 on my Windows XP Pro SP2 computer using the
<-reseal -mini switches as outline in the "Preserving OEM Pre-Activation
when
<Re-installing Windows XP"
<
<Everything is set-up IAW with the above KB article. Yet I get this error
<message:
<"There is an incompatibility between this tool and the current operating
<system. Unable to continue."
<
<Anyone come across this before? Can anyone point me in the right direction?
<TIA
<
<Guy McDowell
<