Windows XP – Sysprep – Default profile settings
If you want your administrator profile on the reference image to apply as the default profile for all users, you will need to set the “UpdateServerProfileDirectory” command in your sysprep file before you capture the image. Microsoft has changed this a back and forth between the various service pack releases.
Here is a link from the Deployment Guys with some more information:
http://blogs.technet.com/deploymentguys/archive/2008/02/18/configuring-default-user-and-computer-settings-for-windows-image-deployment.aspx
Specific to WinXP SP3:
http://blogs.technet.com/deploymentguys/archive/2008/05/22/configuring-default-settings-for-windows-image-deployment-update-for-windows-xp-sp3.aspx
Here is some information from the Microsoft KB:
http://support.microsoft.com/kb/959753
How to customize the default local user profile in Windows XP or in Windows Server 2003
In Windows XP and in Windows Server 2003, updates that you have installed may change the method that you use to customize the default local user profile. For more information, see the following sections.
Windows XP Service Pack 2 (SP2)
The default behavior is to automatically copy customizations from the administrator profile to the default user profile. Therefore, no additional steps are required to customize the profile.
Windows Server 2003 Service Pack 1 (SP1) or Windows Server 2003 SP2
The default behavior is to automatically copy customizations from the administrator profile to the default user profile. Therefore, no additional steps are required to customize the profile. You can disable this functionality by setting a parameter in the Sysprep.inf file. This parameter prevents the Minisetup process from copying customizations from the administrator profile. To do this, set the parameter in the "UNATTENDED" section of the Sysprep.inf file as follows:
[UNATTENDED]
UpdateServerProfileDirectory=0
Windows XP Service Pack 3 (SP3) or hofix 887816 is applied
Hotfix 887816 disables the automatic copying of customizations. Therefore, you must configure a parameter in the Sysprep.inf file to enable the Minisetup process to copy the customizations from the administrator profile. To do this, set the parameter in the "UNATTENDED" section, as follows:
[UNATTENDED]
UpdateServerProfileDirectory=1
Note Windows XP SP3 includes hotfix 887816.