Let me state it extremely explicitly clear first:

If you make use of Daemon Tools to read .ISO files as virtual CD/DVDs, uninstall it before attempting to upgrade Windows to another edition or repair the installation.

And so I thought "what the heck, what could go wrong?" when Windows Vista's upgrade checking tool warned me that a certain "SCSI controller" would not be compatible for the upgrade, but nonetheless would be able to proceed with converting Home Premium into the Ultimate Warrior. Two hours later I got greeted by an error dialog that hinted to me what that SCSI controller mambo really was all about.

Initialization error 0. This program requires at least windows 2000 with SPTD 1.43 or higher. Kernel debugger must be deactivated.

Searching around for information regarding that error message, seems like the SPTD driver Daemon Tools uses to virtualise the optical drive has become a white elephant of a remant of the previous Windows; something  unusable by the new instance. I tried to reinstall Daemon Tools but it got stuck into a long loop of attempting to install a new SPTD driver, in vain, and rebooting into yet another unsuccessful cycle of the same activity.

Time to uninstall the existing Daemon Tools, I guess.

Setup is unable to validate installation.

Great. So I cannot use it, nor can I remove it. Hands up those who wish we could appeal to the judge to issue court orders to undesirable tenants to move out of our computers.

Fortunately for me, one adventurous user was desperate enough to muck around the Registry murk to remove the parasites that directly wreck havoc with the system. In short, what needs to be done is, if you failed to heed the above advice,

1. Reboot in Windows Safe mode, log in as an administrator.
2. If it asks to load the sptd.sys driver, deny it. It did not appear for my case.
3. Look for C:\windows\system32\sptd.sys, exterminate it with extreme prejudice. If there is another sptd****.sys (**** are some numbers), destroy it as well. There was only sptd.sys in my machine.
4. Next open up the Registry Editor (regedit.exe).
5. Look for anything with "sptd" and conduct massive genocide.
6. Some of them cannot be directly deleted because permissions for the keys don't allow the Administrators group modification permissions. For this matter,
1. Right-click on the key to bring up the context menu and select Permissions... .
2. In the Security tab click on Advanced.
3. In the Owner tab, select your current user account, and click Apply.
4. Go back to the Permissions tab, grant Administrators Full Control - select it and click Edit..., where the specific permissions for that group will show up. Select Full Control for Allow and click OK.
5. If the Administrators group is not in the default list of permission entries, click on Add... instead and key in "Administrators" as the group to be added and OK, then perform step 6.4.
6. Check the Replace all inheritable permissions on all descendants with inheritable permissions on this object option and click OK.
7. Carry on as with step 5. If it still shows up with Denied errors, that means some children keys still did not get the permission propagated. You will have to perform step 6 on children keys explicitly before attempting to delete again.
8. Restart Windows in regular mode, and reinstall Daemon Tools.

Three hours wasted fighting this when I should have spent time reading up important documents. Maybe I should have placed this in my Curse Diary instead.

Hey i was trying to install dt pro and when i try and use it it says the same error msg.  Only thing is i am on windows exp sp2...............any ideas people???? i could shoot some one right now, im so pissed with this.

The same troubleshooting steps should still apply for Windows XP.