Found this on a search for same problem
Solution that worked for me:
Step I. backup registry
-------------------------------------
1. Click Start->Run, type "regedit.exe" in the Open box, and click OK.
2. In Registry Editor, click File->Export.
3. Specify a name in the File Name box, making sure that "All" is selected
in the Export range box, and then click Save.
***(Probably not a bad idea to create a RESTORE point in XP also just to be
safe)
Step II. Delete some keys
-------------------------------------
1. Click Start->Run, type "regedit.exe" in the Open box, and click OK.
2. Navigate to HKEY_LOCAL_MACHINE\System\Setup"
3. If there is any key or values named "FactoryPreInstallInProgress", please
right click and delete it.
4. Repeat the above steps to delete
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Factory
5. Restart the computer.
Upon restart my PC ran the Hardware Wizard and prompted me for a restart so
it could rebuild the deleted registry keys. After restart it was fixed and I
am now able to use the "Add Hardware Wizard".
Thanks goes to Doubletrouble2004 on
http://forums.windrivers.com/showthread.php?t=65537