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In the template, the VM originally had a static IP address, but I have since created another new template (from the original) that uses DHCP - however it does have a statically assigned DNS server. Everything else in the template is whatever is defaulted by VM Tools.
I did not sysprep my template because I thought the Guest Customization script would handle all that type of stuff. I did have to manually put the XP SP2 deployment tools in my VC.
I'm attaching the guestcust.log file so you can see the errors.