I recently had to re-install Windows XP onto a laptop and was wondering to myself if there was a way to install XP onto a computer without using a CD. After doing a Google search on the subject and testing many different ways that were suggested. I found the following websites that worked for me.
Hopefully, they will work for you too.
Installing Windows XP from a USB key
Make a bootable USB installer for Windows XP, Vista, 7 with WinToFlash
I used WinToFlash to create a Windows XP install on a USB Flash Drive. Worked great - very cool.