I went back and tried my older 'non-working' version with the newer version of nlite, and it was still a no-go. I think that perhaps my issue had something to do with user permissions. There was something about this on the web regarding the error code I got. Also, FWIW- I got this error just as 'scanning your hardware' dialog poped up. I can't say exactly what it was, as I made several changes...
I got it all installed, chipset drivers, sound card drivers, video drivers. Made a few tweaks, defrag and I'm done. It's weird, I feel like I should have so much more to do to get this done. I'm not even going to bother to image it - this way isn't much more work. (and I've never had to use an image yet) I'm used to installing windows and tweaking everything out, gpedit.msc, updating, ghost, etc. Most of my tweaks were made ahead of time... nLite from now on!
Now on to FE's and such....
Rick