Several people have tried to use the install.wim from the Windows Vista installation media in an Install an existing image package task sequence.  They are surprised to discover that, upon completion, the operating system is on the D: drive instead of the C: drive.  The short explanation for why this happens is that the operating system volume for the images in install.wim is D:.  In other words, when the image was captured, the reference machine had the operating system on volume D:.  Why this is the case for the install.wim that ships on the Windows Vista installation media is beyond the scope of this blog.

OSD preserves the drive letter of the operating system volume in the image when it applies the image to the target computer.  If OSD let the operating system assign itself the first available volume letter (typically C:), and this letter did not match the operating system volume letter in the image, then Windows setup would fail due to invalid volume references.  I leave it as an exercise for the reader to verify this at home:
1. boot to Windows PE
2. format your drive
3. using imagex.exe, apply an image from the install.wim in the Windows Vista installation media
4. reboot to the hard drive

Windows Setup does a lot of work to "fix up" drive letter references in the registry and elsewhere, so that this is not the case for Setup-based installations.  Duplicating this work in OSD was beyond the scope of ConfigMgr 07.  In addition, the images applied by OSD may contain arbitrary third-party applications, which may contain hard-coded drive references in the registry, which OSD may not be able to determine how to handle correctly when the operating system's drive letter changes.

The supported method for generating an image which can be used in an Install an existing image package task sequence is to capture an image of a reference machine, which can be built manually or using the Build and capture a reference operating system image task sequence.