Windows Setup could not reinitialize the deployment engine. To install windows, restart the installation.

Applies To: Windows | Windows Vista | Install, Upgrade and Activate

Turns out the problem appears to have been an issue formatting the drive through the Vista CD. 

Get GParted.
http://gparted.sourceforge.net/download.php

Download and burn the ISO with ImgBurn:

http://neosmart.net/wiki/display/G/Burning+ISO+Images+with+ImgBurn

From there load up GParted with the CD in your tray. It is a bootable CD. From there select the partition you want to install to. Right click on that partition and you will see the format option. Choose the NTFS option and format the drive. Then restart with the Vista DVD in the Tray.

Go thru the boot process. It should now work.

The issue you are having is related to the format. Vista does not do a full format it does just a quick where it erases the data.
The problem is that you have a corrupted spot on the hard drive which is causing this issue.