I think I figure out what your problem was warez. I was tinkering with the latest version and I see that they added new stuff.
I was thinking about you saying the you would insert your windows cd when the WFP error came up. sticking the window cd in kinda defeat the purpose of tweaking the cd as the windows cd will undo almost all of the changes that you made with Nlite. I always hit cancel and kept those unrecognizable versions which is why I didn't have problems
you need to check this SFC option under tweaks so you will stop having problems. you will never see the WFP error again. this option wasn't on my version of nlite