There is apparently an issue with using the Windows Home Server Restore CD on systems with certain RealTek network adapters. The driver on the WHS Restore disc seems to be defective and cannot start the network adapter to find the server when trying to do a restore. This is fixable, but is a pain in the neck to begin with.
After doing a Bing search, it seems like there are a number of reports of the same issue for people that have the RealTek 8111, or some variant like 8111C. I believe this generally ships as an onboard network adapter on motherboards, including mine, which is a Gigabyte GA-EP45-UD3R. What happens after booting to the WHS Restore CD is that the WinPE environment detects the hardware and, if you click on Show Details, reports a RealTek RTL8111/RTL8168 NIC. It looks like everything should work, but when the restore process tries to find the Home Server, it fails both automatic and manual because there is no network started.
The solution is to download the driver straight from RealTek on another PC if necessary, extract it and put it on a USB flash drive. Stick the flash drive in a USB port and boot the computer to the WHS Restore CD. After the hardware is detected, click on Show Details to see the hardware detected. Select Install Drivers button, and click Scan. The working RealTek drivers should be found on the USB key, and the name of the detected network adapter should change in the list. At this point, when the restore process tries to find the Home Server on your network, it should work and barring any other issues you should be able to complete the restore.
Using the Realtek driver, my restore of 64-bit Windows 7 completed successfully from my Home Server.
Realtek 8111/8168 Driver Download Page – Get the Windows XP/2003 driver package (not the installer program), and unzip to the USB flash drive