Friend of mine came across with this issue while installing first exchange 2010 SP1 in the environment. I thought of sharing it with all of you.

While running Setup.com /PrepareAd, the switch failed with below error message.

Checked the location in the error "C:\Users\administrator.LABS\AppData\Local\Temp\ldif.err" and found the log file.

Opened the log file and found the below information.

If you check the ExchangeSetup.log file you will get more detailed information on the error message. What happened was, there was one ADC in the environment and it was turned OFF, turned ON the ADC and replicated (force) the domain controllers and waited for replication to complete.

Ran the Setup.com /PrepareAD and it completed successfully. Installed Exchange successfully.

Cheers,