Recently after performing a server migration i was required to reimage using Windows Deployment Services a workstation to XP. No brainer... until i just by coinsidence walked back past the machine and noticed it was sitting on a prompt during the sysprep stage of the install;
"The uesr you have spcified is not permitted to join the machine to the domain. Would you like to proceed for now and try joining a domain later?"
hmm, hell no.. i thought it was a once off. So i tried reimaging again... Same deal. As it turns out i reimaged multiple workstations that day, so i went and checked them out too. Same deal. Long story short. Here is the fix. Apparently it only applies to 08 and above for windows xp domain joins.
Open Group Policy > Domain Controllers
right click and edit default domain controllers
Go to Computer Configuration > Policies > Administrative Templates > SYstem> Netlogon
Select Enable Allow Cryptography Algorithms compatible with Windows NT 4.0
This allows unsecure domain join for windows XP sysprep thus resolving this problem.