If you want a "lite" XP, use http://www.nliteos.com
It'll make the ISO for you (which Nero can burn), remove the junk you don't want/need, slipstream in drivers, and even slipstream in alot of software, plus allow you to tweak a bunch of settings, like disabling system restore, classic theme, etc.
Incredible little program...I'd be lost without. Cuts my "reformat-reinstall everything" phase to about 10 minutes
BenQ 1655, BenQ 1620, LG 4167, Plex PX-716SA, Samsung SH-S162L, SH-S182M, Pioneer 111D, Lite-On SHM-165H6S and 1.9TB of HDDs to feed 'em and an X2/4800 to crunch for 'em.