I've just been trying to build a new CD and PE builder wouldn't work, it just froze on copying setuphiv requiring a reboot.
It did this several time's I even deleted all the contents and extracted everything again same results.
After several reboots I decided to see if it was Sophos, so I turned of the SavService, tried PEBuilder this time it worked.
So it appears the New Sophos is somehow causing a major problem with PEBuilder.
As Sophos is only aimed at business user's for the majority of people this won't be a issue.