It’s unbelievable that Windows Vista and 2008 Server are so dumb. As soon I connect a USB drive to my server and boot, it refuses to use my hard drive for a new OS install and gives me “Windows could not determine if this computer contains a valid system volume” error.
So, why did I have a USB drive connected? Because I wanted to setup a new Windows 2008 Standard Server for the office, but from home during my spare time. I HAD to have the drive connected in order to load my RAID drivers during install. I started playing around with different BIOS settings to see if I can get Winblows to install properly. Disabling USB controller was basically not an option. I looked at my boot sequence settings and my flash drive wasn’t even enabled, so I went ahead and enabled it, but moved it to down after my DVD drive and RAID controller. Tried again, no success. I was lucky that my high end RAID card had a boot partition feature… I created a boot partition, disabled USB and installed Windows.
Anyway… Rob commented with a simpler way which didn’t apply to my remote installation dilemma, but works for the rest (thank a lot, Rob). Remove the USB drive right after RAID drivers are loaded, wait a bit and then try to pick a partition for your OS. That works… the USB issue is something that keeps giving since I ran into another problem with Windows 7 RTM installation. You can check the “related articles” link at the bottom of the page.