Mark, will there be an issue if I have the usb stick formatted as NTFS instead of FAT32? I bought a 32gig Kingston so that I can fit the image.vhd right on the same USB stick for simplicity.
Also, noticed a typo in your drive normalization area: if %usbdriveletter%==C set usbdriveletter=C (the first "C" chould be lower case "c")