This is a quick compilation of how to create a slipstreamed
Windows XP SP3 CD.
It is assumed that anyone who reads this has some familiarity
with advanced tools and command line actions.
Download XP SP3 from Microsoft.
Copy the files from your Windows XP CD into an empty directory on
your hard drive, e.g: C:\XP.
Install Nero Burning ROM 8 (later may also work). Download from href="http://www.nero.com/eng/index.html">http://www.nero.com/eng/index.html.
Install ISOBuster. Download from href="http://www.nero.com/eng/index.html">http://www.nero.com/eng/index.html.
For simplicity I'll call the downloaded service pack file xpsp3.exe,
even if it is named with a different name.
Unpack the service files with the command: xpsp3.exe
-x:c:\sp3
Change directory to C:\sp3\i386\update and execute the
command: update -s:C:\XP. The files in the directory C:\XP
will be updated in a few moments.
Start ISOBuster and extract the IMG file from the
Bootable CD folder into a temporary directory on your hard disk. The
file may be called Microsoft Corporation.img, using the directory
C:\tmp will be fine.

Start Nero Burning Rom and create a new bootable CD.
Notice the fields marked with yellow, you MUST make sure that you have
the correct value in these. (No Emulation, 4 loaded sectors.)

Make sure that the following data is set for the ISO file format.
The character set MUST be DOS. Using the default ISO 9660 will
not work well.

Manually set the label of the CD.

Make sure that the disc is finalized. In some cases it won't boot
unless you finalize it. Click on the New button to continue.

Add the files to the CD by drag&drop from the folder where
you stored them. Select the target as Image Recorder, which
allows you to produce an ISO file. This is highly recommended since you
can verify the ISO file with ISOBuster before you burn it. Then you can
click on the Burn icon to start creating the image.

Verify that the Finalize disc is checked and start burning.

Open the ISO file that you created with ISOBuster and verify that
the bootable image is flagged with No Emulation.

Also check in the I386 directory of the image that the file CYCLAD-Z.IN_
actually have this name and not CYCLAD_Z.IN_ (it must have a
dash, not an underscore)

Also verify the UTOPIA files - they must have a tilde in the
name, not an underscore or other character.

You may now burn a real disk from the image file.
To speed up the installation you may want to tweak it by creating a WINNT.SIF file.
Below is an example from the one I used. You will probably want to tweak it.
;SetupMgrTag
[Data]
AutoPartition=0
MsDosInitiated="0"
UnattendedInstall="Yes"
AutomaticUpdates="Yes"
[Unattended]
UnattendMode=ProvideDefault
OemSkipEula=Yes
OemPreinstall=No
TargetPath=\WINDOWS
Repartition=No
FileSystem=*
UnattendSwitch="yes"
WaitForReboot="No"
KeyboardLayout="XXXXX"
[GuiUnattended]
EncryptedAdminPassword=NO
OEMSkipRegional=0
TimeZone=110
[UserData]
ProductKey=XXXXX-XXXXX-XXXXX-XXXXX-XXXXX
FullName="User"
OrgName="."
[Identification]
JoinWorkgroup=WORKGROUP
[Networking]
InstallDefaultComponents=Yes
[Components]
msmsgs=off
msnexplr=off
[Shell]
DefaultStartPanelOff = Yes
DefaultThemesOff = Yes
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