Install Windows XP via USB on device running Ubuntu 11.10

Not sure which direction you are trying to achieve, but there are a couple things to consider.

1. if you are installing WinXp inside VirtualBox or VMWare Player for ubuntu, it is really no brainer.. just pop in the ISO image, and VMWare should take care of installation for you.
2. if you are doing dual booting, you need to determine if your BIOS can boot USB. If so, I would go ahead and build a Windows PE or Bart's Boot disk. Once you boot into the PE environment, you can use diskpart to format the partition (i.e. in NTFS, not FAT32). After that you browse to the WinXp installation folder and kick off the installation with command like "Winnt32.exe /syspart:d: /tempdrive:d /makelocalsource" Once installation done, you then need to fix the MBR, so that GRUB can co-exist with Windows. Takes about one afternoon to get both Windows & ubuntu to play nice together.