Slipstreaming Windows XP Service Pack 3 and Create Bootable CDSlipstreaming a Service Pack, is the process to integrate the Service Pack into the installation so that with every new installation the Operating System and Service Pack are installed at the same time.
Slipstreaming is usually done on network shares on corporate systems, but it also makes sense for the home user or small business user to do.
Microsoft added the ability to Slipstream a Service Pack to
Windows 2000 and
Windows XP. It not only has the advantage that when you (re)install your
OS, you don't have to apply the Service Pack later, also if you update any Windows component later, you'll be sure that you get the correct installation files if Windows needs any.
Slipstream Windows XP Service Pack 3Download the (full) "Network Install" of the
Service Pack (English version [316.4 MB]), and save it to a directory (folder) on your hard drive
(in my case E:\XP-SP3). Other languages can be downloaded from the
Microsoft Download site.Note: do not use spaces in the folder name!Next copy the contents of your
Windows XP CD to your hard drive. Just create a folder
(I used \XP-CD), and copy all the contents of your
Windows XP CD in that folder.
Next, open a
Command Prompt (Start > Run > cmd), and go to the folder where you downloaded SP3
(cd \foldername). Type the command:
servicepack filename /integrate:drive/path. In my example the command is
WindowsXP-KB936929-SP3-x86-ENU.exe /integrate:E:\XP-CD. 
If you get the error:
This
Service Pack cannot be integrated into a destination that also has integrated
Software UpdatesConsult the
Service Pack documentation for more details about supported integration scenarios.
This is caused by the fact that your
Windows XP CD contains updates that will be automatically installed when you run setup. These type of CD's will usually be from larger OEM suppliers (like
Dell, HP, or others).
You cannot use this type of
CD to create a slipstreamed install.
First, the files will be extracted, and next they will be integrated in your
Windows XP files: 
When ready, you should get a confirmation.
Windows XP Service Pack 3 has now been integrated into your original
Windows XP files. 
Creating a Bootable CDFor this part I used
IsoBuster and
Nero Burning ROM 7*.*)You can of course use your own favorite
CD-burning program.
After you install
IsoBuster, you can choose to use only the product's free functionality for what we want to do,
IsoBuster will look like the image below (you need to have your original
Windows XP CD in the
CD-ROM drive).
Start to extract the boot loader from the original
Windows XP CD. Using
IsoBuster, select the "
folder"
Bootable CD, and right-click
Microsoft Corporation.img. From the menu choose
Extract Microsoft Corporation.img, and extract it to the folder on your hard drive where you have your Windows XP files (D:\XP-CD in my case).
Next, start
Nero Burning ROM, and choose
CD-ROM (Boot) in the
New Compilation window. On the Boot tab, select
Image file under
Source of boot image data, and browse to the location of the
Microsoft Corporation.img file. Also enable
Expert Settings, choosing
No Emulation, and changing the
Number of loaded sectors to
4 (otherwise it won't boot!)
The
ISO tab should be configured correctly as shown below:
If you have an older version of Nero you won't have the option Do Not Add ";1" ISO file version extention under Relax ISO Restrictions. You won't be able to boot your new CD, so update Nero!You can configure the
Label tab to your liking, I would however recommend that you keep the
Volume Label the same as on your original Windows XP CD. Here are some (English) Labels:
* Windows XP Professional:
WXPCCP_EN * Windows XP Home:
WXHCCP_EN * Windows XP Professional OEM:
WXPOEM_EN * Windows XP Home OEM:
WXHOEM_EN 
Next press
New, and from the
File Browser window, select the files and folders from your slipstreamed location (in my case
D:\XP-CD). Now drag & drop the selected files in the ISO1 window.
Next, burn your new
CD.
You now have a
Bootable,
Slipstreamed Windows XP Service Pack 3 CD!
