If you have questions about customizing Windows XP that are nLite-specific, please post them in the nLite forum, not here. If you have questions regarding the unattended installation of Windows XP, please post them in the Unattended Windows 2000/XP/2003 section.
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[Question] Apply to All Folders Disabled
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Are you accessing Folder Options from within Control Panel? If so, try it from withing My Computer or Explorer, by selecting a particular folder and then going to Tools => Folder Options.