This was a pain for me, so I hope this helps someone.
I made 15 attempts to update my ASUS CM6870 from the Windows 10 Anniversary Edition to the Creators Edition (Creators Update), I *always* hung hard around 40 or 42% after the first system reboot, with the 'rolling' animation ground to a halt. This almost always points to a hardware problem.
I did everything to find the bad hardware! I disconnected all of the USB, ripped out all of the superfluous drivers, did a clean reboot, did a driver uninstall on my NVIDIA drivers using DDU, and uninstalled every program that had a funky driver like the VMWare standalone converter and my Cisco Anyconnect VPN. Nothing worked.
Each reboot reported "0xc1900101 - 0x30018 the installation failed in the FIRST_BOOT phase with an error during SYSPREP operation"
Digging into the clues from files left behind in C:\$WINDOWS.~BT\Sources\Panther, I saw that the last thing before failure was a bunch of SPPNP messages which seems to be the SYSPREP driver loading phase. There were also a bunch of <NUL> characters at the end of the file. Some piece of hardware was refusing to play nice. I had painstakingly removed everything I could without opening the case.
Finally, based on various hints on forums, I cracked open the PC and pulled out my PCIe wireless card. Boom. Fully installed.
The Wireless card was a PCIe x1 in a PCI x16 slot if that matters, and it was the ASUS branded MediaTek Railink technologies RT3090 wireless card.
(PCI\VEN_1814&DEV_3090&SUBSYS_760111AD&REV_00)
Once the Creators Update was installed, I was able to reinstall the card without incident. Go figure.
Edit: This problem probably applies to any system using a P8H61 or P8H77 motherboard. According to this thread, the P8H77-M PRO (CM6870) is affected, as are other ASUS desktops like the ASUS CM6730 with a P8H61‑M PRO with that RT3090 wireless card.
Other commenters report that the ROG CG6480 / TYTAN CG8480 and CM1855 are also affected, presumably also with the errant RT3090 card.
I also observed the problem with an Ascend Ascendtech WN7601R-H1 PCI card in HP desktops. This is also an RT3090 PCIe card.
Commenter Chris Deer reports that he also had the problem with the Acer L4610, L4620, and L480, possible other Acer "L" models.
The Fall Creators Edition and April 2018 update also have this problem, so the installer is not yet fixed to place nice with the RT3090 wireless card.
One commenter noted that moving the card from a PCIx16 slot to a PCIx4 slot also fixed the problem, so it may be an interaction between the card and the northbridge (motherboard chipset) in certain slots.
EDIT: WARNING: Be careful removing and re-inserting the wireless card; make sure the power cord is removed from the power supply. The sound card chip is right at that slot and I damaged it, so now my system no longer recognizes when speakers are attached. Looks like I scratched a trace on the motherboard. I know it is a hardware problem because booting a Linux Live USB showed the same problem.