Trying Windows 7 RC0 released today on MSDN (32 bit version). Using ESX 3.5 Update 3 and VC update 3.
Built template vm and working. Can't deploy I don't think with VC and have sysprep customization until Update 4.
Noticed if I run sysprep (c:\windows\system32\sysprep) in the OS I get a "fatal error while trying to sysprep" message.
Anyone seen this issue or have a workaround?