I found an odd fix to a problem on a new client PC. I was re-Installing Windows 7 SP1 on a new Acer laptop so as to change the install language (why aren’t OEMs in the EU mandated that they must offer all available Eurozone languages for their retail products if they already have that language as a first-time selection ?)  and I got the forever hung at “setup is preparing your computer for first use” problem.

If you search the Internet for an answer to this then there is nothing that is very clear as to what you can do when you are sitting in front of  a machine that works perfectly, will install but for the last few steps of the installation, fails to complete.

AFAIKS the cause is slipstreamed installers either stalling or failing and the Windows first use program is just spinning its wheels waiting for them to exit.

What I did at the “setup is preparing your computer for first use” screen was twofold:

1) I clicked SHIFT+F10 to get a command prompt, then typed in devmgmt.msc to get the device manager. It will have the unknown or devices without drivers expanded. I disabled some but I also found that you can install drivers too. If you have all your manufacturer drivers on a USB stick then just right-mouse and select update driver and then browse to the root of your USB stick e.g. E:\ and have it search subdirectories and it should find the right driver for that device.

—-and at the same time I..

2)   typed in taskmgr.exe to get the Task Manager and in  the processes list I killed any running msiexec.exe processes and cmd.exe command prompts if they looked like they were hung i.e. no CPU and the disk light on the Laptop wasn’t really running. This step 2) is the most important step as it seemed to allow the first use setup to step on.

The install then quickly finished the “setup is preparing your computer for first use” stage and I got the username, hostname and so-on questions.

The SHIFT+F10 trick and using the devmgmr.msc and taskmgr.exe works at any stage from the “setup is preparing your computer for first use” display onwards because Windows is actually running only services haven’t started and the hostname and account details haven’t been created.

Hope this helps – it worked for me.