Was recently working on a custom.xml for a client with USMT 4.0 and was struggling with getting my exclusions to work.  My syntax appeared to be correct, however it wasn’t excluding the music file extensions I had created like it was supposed to.  It was excluding them on the drive, but not on the desktop where I had placed some files to test.

After some searching, I came across this great blog post:

http://blogs.technet.com/b/askds/archive/2010/03/03/usmt-4-0-and-custom-exclusion-troubleshooting.aspx

After reading through that post, I realized I had the incorrect syntax in my custom.xml.  My context was set to context=”System” instead of context=”UserAndSystem”, doh!  After making that change and testing, I finally got the behavior I was expecting.  Mind the details!

So be sure to read the above link for the following issues.

Common cause 1: Your XML uses exclude and not unconditionalExclude
Common cause 2: You have set unconditionalExclude in the wrong context
Common cause 3: You have not correctly provided the case for unconditionalExclude