One of my co workers Chris Henley just did a great video/screencast on WinPE. What is WinPE? Have you ever done custom setups of Windows? Have you ever needed a small version of the OS to boot a box and troubleshoot hardware issues? Yep all of that is WinPE. It's part of the Windows Automation Installation Kit (WAIK).
Go check out Chris' video http://blogs.technet.com/chenley/archive/2008/08/27/custom-win-pe-images.aspx
Chris shows you step by step how to do this! Great 17 minute video!!
And download it here: