I've built a Task Sequence to install and capture a base XP image.

I keep getting an error when it's trying to install the deployment tools.  It freezes then gives me an error code of 0x00000001.  The sysprep package I created has all the files from the deploy.cab and a program to launch factory.exe.  The packages is installed on the primary and PXE deploy point.  Am I missing something?  I've tried recreating the sysprep packages, the task sequence and nothing is working to resolve the issue.

If its failing when it tries to build your desktop? If yes, then check for the installable location, unattended install configuration, etc.
If its failing when tryting to capture your desktop, then check PXE configuration, permissions to write the image to the destination, etc

I had the same problem, my NIC driver wasn't installed (infact I hadn't installed any extra drivers). Press F8 at the point where it's timing out and as long as you have command line access enabled in you WinPE then you should be able to IPCONFIG to see if the card is working or not.