When starting a virtual machine from an .ISO image created with Provisioning Server Boot Device Manager the following error is returned and the virtual machine cannot start the vDisk.

Downloading tsbbdm.bin from 192.168.1.1
PXEENV_UNDI_ISR_IN_PROCESS timed out FAILED!

The PXE and TFTP services must be running on the Provisioning Server the first time a virtual machine is started, even if using an .ISO image to boot and not DHCP.

If using an .ISO boot image this issue may be resolved by explicitly setting the boot order to CD-Rom then Network in the workstation virtual machine BIOS. Without the boot order set the virtual machine will typically fail to boot twice with the above error, and then boot successfully the third time.

An upcoming hotfix 8422 for PVS5.0 SP1a/SP2 will address the following issue :

"Currently when using Boot Device Manager, all PVS target devices employ the same DHCP request Transaction ID so that the Windows ARP stack is confused into mapping different MAC address to the same IP address. As a result, the PVS target devices would hang when booting from the USB, CD-ROM (ISO) and so on."

Update: The 8422 hotfix is now available:

Citrix Provisioning Server 5.0 Service Pack 1a / Service Pack 2 Hotfix 8422
http://support.citrix.com/article/CTX120894

Note: This can also be caused by the Provisioning Server running out of CPU resources, and being unable to service the request in a timely manner.

Citrix Provisioning Server 5.0 Administrator’s Guide
http://support.citrix.com/article/CTX117916

The Manage Boot Devices Utility provides an optional method for providing IP and boot information (boot device) to target devices; as an alternative to using the traditional DHCP, PXE, and TFTP methods. Using this method, when the target device starts, it obtains the boot information directly from the boot device. With this information, the target device is able to locate, communicate, and boot from the appropriate Provisioning Server. After the user is authenticated, the Provisioning Server provides the target device with its vDisk image.

Supported Boot Devices
The following boot devices are supported in this release:
- USB
- CD-ROM (ISO)
- Hard Disk Partition