"The Operating System Image file you have selected is not supported or has an invalid format"

SMS 2003 produces this error when you have decided to create a new Operating System Package.

The frustrating thing is that it may work on one PC, and not another.

The underlying cause?

Difference versions of OS Deployment Feature Pack were installed.  Version 2.50.3658.1102 caused the error I was having.

The fix to the "… invalid format." error, was to update to version 2.50.3726.2000.