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Very interesting. It completely resets your drivers. So this would be a great way to do a completely clean driver install, if someone was interested in that. Don't switch computers, just run the tool and flush everything hardware-specific, then reboot.
SO, I tried without success: got a fatal error each time I try (even in safe mode).
I have tested all above mentioned methods with all versions of Windows 7, from Starter to Enterprise. It works every time, with one exception: for reasons unknown to me, sysprep seems sometimes dislike Windows Media Player networking service, which is by default started every time Windows 7 starts. In about every third time I've done this, I've got an error message when trying to generalize:
Windows 7 Installation - Transfer to a New Computer-sysprep_fatal_error.png
However, this is not a big problem. You just need to stop the WMP networking service, and run sysprep with generalize option again. You can stop the service in question by typing net stop WMPNetworkSvc to command prompt, and hitting Enter: