OCIA.net has posted an article titled: How To Install Windows XP From A USB Flash Drive. Check it out over here.
"I had heard of installing Vista and even Windows 7 RC using a flash drive, but never XP (my operating system of choice). I spent some time researching and by combining a few things I learned on various sites, put together a method that was pretty quick and worked perfectly. I decided to make this guide (complete with clickable screenshots) for people like me who need a no-nonsense method of installing XP from a flash drive."