yes, myself and others have extensive experience with Windows Embedded. Unless you're building a commercial product, I don't think it's worth it due to costs. I'm currently testing Windows Embedded 2011 and it's great, much better development experience compared to 2009/XPe.
Have you looked into nLite? It's a great tool for creating highly customized XP installations. Search the forums, because we've been working on this stuff for years now and there's lots of good info out there.



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