The Generalize leverages a tool called Sysprep.exe and can be at best compared with the System Cloning Tool we know from XP embedded or WES 2009. It takes care that a cloned image will have a new Security Identifier (SID) on its new target. SIDs are quite important to a Windows system because they are used in a lot of protocols for identification as well as (in combination with other credentials) authentication. In addition to  the SID change Sysprep, which has been around in the desktop deployment space also configures quite a few settings more. In the Generalize pass one should target those settings that need to be identical throughout a device or OS image family. For every Windows release there is a Sysprep version and it is an important best practice always to use the corresponding one for deployment. This save you from a lot of problems, crashes or other headaches. There is a lot of information regarding Sysprep to be found on TechNet, as well.

Overall, if one uses the Generalize settings for a feature in ICE, this will be an identical setting for all target devices using this OS image. During the pass all specific or hardware related information such as SIDs, network GUIDs, user settings etc. are removed from the OS image. Partially these are freshly restored on the target device during the Specialize pass we will focus on next time.
The only way to start this pass is to use the sysprep /generalize command. After it is done it shuts down the system.

Tip:
After shutdown is just about the right time to capture the so called “Golden Image” for your device. If the device is booted the next passes kick in and render the image on the device unusable for mass deployment.

Alexander