How To: Slipstream your XP installation
Step 1: Collect the necessary files
Before getting started, we’ll need to download the full, stand-alone installation of Service Pack 2 (as opposed to performing a web-based upgrade). Go to download.microsoft.com and look under the Windows XP section or simply run Windows Update from Internet Explorer.
While you’re at it, grab the latest drivers for your RAID or Serial ATA controller. If you add them to your install CD, you won’t need to use an old-fashioned floppy drive to install Windows. For an add-in RAID or SATA card, look for the drivers on the web site of your controller chip’s manufacture. Some of the most popular controllers are made by Promise, Intel, Adaptec, and HighPoint. If your controller is integrated onto your motherboard, hit up your mobo manufacturer’s web site.

You can roll your RAID drivers into your XP install disc by slipstreaming!
Step 2: Update your setup files
Our next objective is to extract Service Pack 2 to a folder so we can update our existing Windows setup files. Open the command prompt by clicking Start, Run, and typing cmd.exe. Use the cd (change directory) command to navigate to the folder where you just saved the SP2 executable in the previous step. (The syntax for cd is cd , so if you saved the SP2 executable to, say, C:Downloads, you would type cd C:Downloads to go there.) Extract the SP2 files by typing xpSP2 –x, where xpSP2 is the name of the SP2 executable you downloaded. When prompted for a destination to extract the files to, enter C:xpSP2.
Once the files have been extracted, insert your Windows XP setup CD into an optical drive and copy its entire contents to a different folder on your hard drive. For the sake of simplicity, use C:xpsetupcd as the folder. Now, return to the command prompt and type the following command: C:xpSP2i386updateupdate /s:C:xpsetupcd. This will update your existing Windows setup files with the new code contained in Service Pack 2. A message box will pop up to notify you when the process is complete.

Service Pack 2's built-in updater makes it easy to patch y our original Windows setup files with Microsoft's latest code.
Step 3: Add your RAID/SATA Drivers
We’re now ready to add RAID/SATA controller drivers to our CD (if you don’t want to do this, skip ahead to the final step). Open the folder to which you copied your Windows XP CD (C:xpsetupcd) and create a subfolder called $OEM$. Then, create a subfolder of $OEM$ called $1 and a subfolder of $1 called drivers. The resulting path should be C:xpsetupcd$OEM$$1drivers. This is where Windows Setup will look for drivers that aren’t contained in its standard driver library. For organizational purposes, make a subfolder within drivers named for the type of driver it will contain—for instance, create a RAID folder for RAID drivers or an SATA folder for Serial ATA drivers. You can use any name, as long as it has fewer than eight characters.
With the aforementioned folder structure in place, copy the Windows XP RAID/SATA drivers directly into the folder you created above (we used C:xpsetupcd$OEM$$1driversRAID). If your drivers came in a self-extracting executable rather than a zip file, you may be able to extract its contents manually by opening it in a program like WinRAR. (Alternately, you can run the self-extracting executable, then dig around in your system’s TEMP directory—usually C:/documents and settings/YourUsername/LocalSettings/Temp until you find the right directory). Finally, locate the SYS file for your RAID/SATA controller from among the files you just extracted; it should be named after your specific controller (e.g. fasttx2k.sys for a Promise FastTrak TX2 RAID controller). The drivers for different operating systems may be split into distinct folders, so make sure you find the SYS file that’s intended for Windows XP. Once you find the SYS file, copy it to the i386 folder of your Windows CD (C:xpsetupcdi386).

Adding RAID or Serial ATA drivers to your Windows CD will save you the trouble of using a floppy disc to manually install them every time you reformat.