How does TS manager control the flow of the task sequence? does it keep track of where it is at the moment using a progress files? there is no good documetation out there describing how the TS engine works behind the scene.

i think (not sure however) it uses incremental steps, if you look in the smsts.log file you'll see that individual steps are noted in incremental numbers, Step by Step ConfigMgr 2007 Guides | Step by Step ConfigMgr 2012 Guides | I'm on Twitter > ncbrady

let's say after the imaged PC is rebooted, for instance, setup windows and install cc client step - how does the TS know where it left off before the reboot and continue on to the next task?

TSManager saves its state on the drive before the reboot. That way, it knows how to continue from where it left off. And yes, Niall is correct. The steps are simply numbered, and a counter is incremented each time a step is completed.

i think (not sure however) it uses incremental steps, if you look in the smsts.log file you'll see that individual steps are noted in incremental numbers, Step by Step ConfigMgr 2007 Guides | Step by Step ConfigMgr 2012 Guides | I'm on Twitter > ncbrady And the log files move around as you progress - http://blog.danovich.com.au/2010/03/11/sccm-task-sequence-log-file-locations/My Microsoft Core Infrastructure & Systems Management blog - blog.danovich.com.au