Thanks.
Upon investigating deeper in to my Sysprep crashing in the specialize phase it seems that indeed occasionally it is bombing out on the copy profile. Here is part of an error log from a sysprep crash last night.
The logs from C:\Windows\Panther\UnattendGC indicate that sysprep is crashing on the copy profile.
I have looked for any extra profiles in HKLM\SOFTWARE\Microsoft\Windows NT\ProfileList there are none.
also no extra users in computer management-->Local Users and Groups
There is only Administrator and Guest.
[windeploy.exe] WinDeploy.exe launched with command-line
2011-09-09 21:14:05, Info [windeploy.exe] Setup has not completed, adding pending reboot.
2011-09-09 21:14:05, Info [windeploy.exe] Found generalization state [0x4], setup.exe completion flag [False] --> launching setup.exe.
2011-09-09 21:14:05, Info [windeploy.exe] Launching [C:\Windows\system32\oobe\setup.exe]...
2011-09-09 21:30:25, Info [Shell Unattend] Running 'specialize' pass
2011-09-09 21:30:25, Info [Shell Unattend] ComputerName: generating computer name from user name
2011-09-09 21:30:25, Info [Shell Unattend] ComputerName: generated name 'DCDC-G5GMRBVM30'
2011-09-09 21:30:26, Info [Shell Unattend] ComputerName set to DCDC-G5GMRBVM30
2011-09-09 21:32:21, Error [Shell Unattend] CopyProfileDirectory from C:\Users\Administrator failed (0x8007012b) [gle=0x0000012b]
2011-09-09 21:32:21, Error [Shell Unattend] _CopyToDefaultProfile failed (0x8007012b) [gle=0x0000012b]
2011-09-09 21:32:21, Error [Shell Unattend] CopyProfile failed (0x8007012b) [gle=0x0000012b]
2011-09-09 21:32:21, Info [Shell Unattend] Exiting 'specialize' pass with status 0x8007012b
2011-09-09 21:42:00, Info [windeploy.exe] Process exited with exit code [0x1f]
2011-09-09 21:42:00, Error [windeploy.exe] Setup.exe failed, returning exit code [0x1f]
2011-09-09 21:42:00, Error [windeploy.exe] Failure occured during online installation. Online installation cannot complete at this time.; hr = 0x80004005
2011-09-09 21:42:00, Info [windeploy.exe] Flushing registry to disk...
2011-09-09 21:42:00, Info [windeploy.exe] Flush took 265 ms.
2011-09-09 21:42:00, Info [windeploy.exe] WinDeploy.exe exiting with code [0x80004005]