How do I install Windows XP from a USB pen drive? [duplicate]
While not a direct answer to your question, I used this wiki article when I needed to load my Eee (no CD Drive) with XP from an USB drive. Some tools and techniques there are definitely not limited to just netbooks though. Hope it helps.
Here is a link to an easy way to do this for Windows 7 and Vista that they claim works for XP as well - How To Create Bootable Windows 7, Vista, or XP USB Flash/Pen Drive Quickly.
I have used it for Win 7 but haven't tried it for XP.
There is also this question at SuperUser Windows XP Installation from USB.