Prior to Vista, the default alignment for partitions was cylinder alignment for MBR disks and sector alignment for GPT disks.  With Vista (and Windows PE 2.0), the default partition alignment was changed to 1 MB.  This can result in a 2x performance enhancement, since disk sectors are aligned with the cache line size.  Unfortunately, this may cause some systems to blue screen if the disk was partitioned in Windows PE 2.0 and pre-Vista operating system is installed to it.  The text-mode portion of Setup will complete successfully, but the system will blue screen when it reboots into GUI-mode Setup.  You may also see a blue screen after deploying an image of a sysprepped pre-Vista operating system.  See KB articles 931760 and 931761 for more information.

In order to help customers who experience this issue, we have added a Task Sequence variable, OSDDiskpartBiosCompatibilityMode, to the Partition and Format Disk step.  This variable is not exposed in the Task Sequence Editor, so you have to set it using a machine or collection variable, or explicitly in a Set Task Sequence Variable step, prior to any Format and Partition Disk steps.  If this variable is set to "TRUE", then the Format and Partition Disk step will automatically make the changes to the Windows PE registry described in KB articles 931760 and 931761 prior to partitioning the disk.

We only recommend using this variable if you have hardware which experiences this problem, since you will miss out on the disk performance enhancements.  If you are applying Windows Vista, then you should never need to use this option.