diff --git a/tools/xen/prepare_guest.sh b/tools/xen/prepare_guest.sh
index fe52445..0e11226 100755
--- a/tools/xen/prepare_guest.sh
+++ b/tools/xen/prepare_guest.sh
@@ -10,54 +10,51 @@
 # creating the user called "stack",
 # and shuts down the VM to signal the script has completed
 
-set -x
-# Echo commands
+set -o errexit
+set -o nounset
 set -o xtrace
 
 # Configurable nuggets
-GUEST_PASSWORD=${GUEST_PASSWORD:-secrete}
-STAGING_DIR=${STAGING_DIR:-stage}
-DO_TGZ=${DO_TGZ:-1}
-XS_TOOLS_PATH=${XS_TOOLS_PATH:-"/root/xs-tools.deb"}
-STACK_USER=${STACK_USER:-stack}
+GUEST_PASSWORD="$1"
+XS_TOOLS_PATH="$2"
+STACK_USER="$3"
 
 # Install basics
-chroot $STAGING_DIR apt-get update
-chroot $STAGING_DIR apt-get install -y cracklib-runtime curl wget ssh openssh-server tcpdump ethtool
-chroot $STAGING_DIR apt-get install -y curl wget ssh openssh-server python-pip git vim-nox sudo
-chroot $STAGING_DIR pip install xenapi
+apt-get update
+apt-get install -y cracklib-runtime curl wget ssh openssh-server tcpdump ethtool
+apt-get install -y curl wget ssh openssh-server python-pip git vim-nox sudo
+pip install xenapi
 
 # Install XenServer guest utilities
-cp $XS_TOOLS_PATH ${STAGING_DIR}${XS_TOOLS_PATH}
-chroot $STAGING_DIR dpkg -i $XS_TOOLS_PATH
-chroot $STAGING_DIR update-rc.d -f xe-linux-distribution remove
-chroot $STAGING_DIR update-rc.d xe-linux-distribution defaults
+dpkg -i $XS_TOOLS_PATH
+update-rc.d -f xe-linux-distribution remove
+update-rc.d xe-linux-distribution defaults
 
 # Make a small cracklib dictionary, so that passwd still works, but we don't
 # have the big dictionary.
-mkdir -p $STAGING_DIR/usr/share/cracklib
-echo a | chroot $STAGING_DIR cracklib-packer
+mkdir -p /usr/share/cracklib
+echo a | cracklib-packer
 
 # Make /etc/shadow, and set the root password
-chroot $STAGING_DIR "pwconv"
-echo "root:$GUEST_PASSWORD" | chroot $STAGING_DIR chpasswd
+pwconv
+echo "root:$GUEST_PASSWORD" | chpasswd
 
 # Put the VPX into UTC.
-rm -f $STAGING_DIR/etc/localtime
+rm -f /etc/localtime
 
 # Add stack user
-chroot $STAGING_DIR groupadd libvirtd
-chroot $STAGING_DIR useradd $STACK_USER -s /bin/bash -d /opt/stack -G libvirtd
-echo $STACK_USER:$GUEST_PASSWORD | chroot $STAGING_DIR chpasswd
-echo "$STACK_USER ALL=(ALL) NOPASSWD: ALL" >> $STAGING_DIR/etc/sudoers
+groupadd libvirtd
+useradd $STACK_USER -s /bin/bash -d /opt/stack -G libvirtd
+echo $STACK_USER:$GUEST_PASSWORD | chpasswd
+echo "$STACK_USER ALL=(ALL) NOPASSWD: ALL" >> /etc/sudoers
 
 # Give ownership of /opt/stack to stack user
-chroot $STAGING_DIR chown -R $STACK_USER /opt/stack
+chown -R $STACK_USER /opt/stack
 
 # Make our ip address hostnames look nice at the command prompt
-echo "export PS1='${debian_chroot:+($debian_chroot)}\\u@\\H:\\w\\$ '" >> $STAGING_DIR/opt/stack/.bashrc
-echo "export PS1='${debian_chroot:+($debian_chroot)}\\u@\\H:\\w\\$ '" >> $STAGING_DIR/root/.bashrc
-echo "export PS1='${debian_chroot:+($debian_chroot)}\\u@\\H:\\w\\$ '" >> $STAGING_DIR/etc/profile
+echo "export PS1='${debian_chroot:+($debian_chroot)}\\u@\\H:\\w\\$ '" >> /opt/stack/.bashrc
+echo "export PS1='${debian_chroot:+($debian_chroot)}\\u@\\H:\\w\\$ '" >> /root/.bashrc
+echo "export PS1='${debian_chroot:+($debian_chroot)}\\u@\\H:\\w\\$ '" >> /etc/profile
 
 function setup_vimrc {
     if [ ! -e $1 ]; then
@@ -72,20 +69,15 @@
 }
 
 # Setup simple .vimrcs
-setup_vimrc $STAGING_DIR/root/.vimrc
-setup_vimrc $STAGING_DIR/opt/stack/.vimrc
-
-if [ "$DO_TGZ" = "1" ]; then
-    # Compress
-    rm -f stage.tgz
-    tar cfz stage.tgz stage
-fi
+setup_vimrc /root/.vimrc
+setup_vimrc /opt/stack/.vimrc
 
 # remove self from local.rc
 # so this script is not run again
 rm -rf /etc/rc.local
-mv /etc/rc.local.preparebackup /etc/rc.local
-cp $STAGING_DIR/etc/rc.local $STAGING_DIR/etc/rc.local.backup
+
+# Restore rc.local file
+cp /etc/rc.local.preparebackup /etc/rc.local
 
 # shutdown to notify we are done
 shutdown -h now