I have seen this duscussed before and a fix was made. Even though I have selected the advanced option to fix the mouse and keyboard unresponsiveness I am still having the problem.
I am using winbuilder LiveXP project instead of BartPE. (I hope its still ok to post this here. )
I have just downloaded the project files so everything is the latest version.
The only thing I might be doing differently is that I am using offlinesysprep on a virtual machine running xp pro and creating an image I can transfer to real hardware. Everything goes fine until I boot up the computer with the new image and get no mouse or keyboard responsiveness.
Let me know if there is any other information I should provide about my system or the process I am using that might help provide an answer.
Thanks.

Do you use advanced configuration to fix keyboard and mouse?

Do you use USB or PS/2 hardware?

Which virtual machine do you use?

Which keyboard and moude does virtual machine use?
Can you name the HardwareIDs? Device manager list the HardwareID.

Which keyboard and mouse does real machine use?
Can you name the HardwareIDs?

Yes I have used the advanced option to fix the mouse and keyboard problem as I have indicated in my post.
Mouse and keyboard are ps/2.
I am using virtualbox.
The virtual machine uses a standard 101/102-key or microsoft natural ps/2 keyboard with hardware id ACPI\PNP0303.
The mouse is a microsoft ps/2 mouse with hardware id ACPI\PNP0F03.
The real machine uses a standard ps/2 keyboard with hardware id ACPI\PNP0303.
The mouse is Microsoft ps/2 mouse with id ACPI\PNP0F03.

Delete registry entries from image:
HKLM\SYSTEM\CurrentControlSet\Enum\ACPI\PNP0303
HKLM\SYSTEM\CurrentControlSet\Enum\ACPI\PNP0F03

There are registy security settings. Take ownership first, delete settings next.

The currentcontrolset did not exist in the image while it isnt running so I deleted the keys under controlset1. Rebooted but did not fix the problem.
So then I went back to my virtual machine. I deleted the specified keys under currentcontrolset and then booted up to the cd. Ran offlinesysprep again and selected the fix for keyboard/mouse unresponsiveness. After booting up to the hard drive with the new image I am getting the same problem.

I have to object to my post being moved to the winbuilder forum as this is not a winbuilder specific issue. My issue is with offlinesysprep and the only dedicated topics for it are in the bartpe forum. Of course it is your forum so I suppose you will move it wherever you please.

According to your OP you are using WinBuilder not PEBuilder and they are completely separate tools. In that you now say that your issue is with OfflineSysPrep I will move it there. And yes OfflineSysPrep is a part of the PEBuilder forums.

I am simply trying to position your posting to where the experts specific to your problem visit most often.

Thanks, Ive used both tools so I know what the difference is. Galapo has a winbuilder script as well as the pebuilder plugin. There is no subforum for offlinesysprep in the winbuilder section so I posted here instead.