Remove Windows components like Media Player, Internet Explorer, Outlook Express...
1. Slipstream - After you extract it to any folder and ran it, you can browse and point to folder on hard drive which contains your windows
If you pointed to right folder with i386 in it and Windows id files, nLite will detect if you have already slipstreamed SP1 or SP2, and if not it will change Browse button to Slipstream, when pressed it asks for Service Pack installation file (or update.exe if you extracted it). Then it Slipstreams it passively. Or you can configure your existing version without slipstreaming.
2. Customize/Reduce - Choose which components to remove from your Windows installation permanently. It's version independent, it's possible because I'm not using filelists, well, allmost. There is only an inf-filelist which then gets parsed for used files, so ~95% of file names are automatically generated from your own inf's. The other 5% are manually added. Most likely nLite will work with future versions of Windows XP without any problem.
3. Advanced Options - Make sure to keep Data directory with nLite and all the files in it unrenamed. Added automatic hacking of syssetup.dll for OOBE disabling (if you choose to remove it, this will not crack Activation). SFC is entirely disabled too simply by copying hacked dll from Data and adjusting registry
. Many options to add in the future, priority so far was on reduction issues.
4. Make ISO - This section is using external file datacdimage.exe which I believe don't need introducing. When reduction process finishes you can copy additional files to installation directory and then press Make ISO, it will ask you for desired ISO name and location.