You certainly don't put an .iso on a flash drive unless you wish to transfer it to another cd. ie to burn it. An iso is a disk image.. a faithful replica of the disk's content. If you wish to use the flashdrive to install XP from, then You need to make the flshdrive bootable,as well as comtain the Setup files. There are plenty of guides on that on the web, but I find this software the most versatile and easy to use. Much like falling off a log...
Search for WintoFlash; the 0.7 beta is current and good. Download it, and use with your cd to build a bootable flashdrive. While doing that you might also consider nLiting your Windows OS... search for nLite, use it to remove the stuff you won't be wanting, make Windows as light n fluffy as duck down.
Whatever you try, you are going to require a Windows cd [either M$ retail or OEM as suits your license] or some other related source for the Windows Setup installation files; anything else we will not help you with.
The above method works fine, I have used it. You only need use the WintoFlash pgm with your file source.
On some computers you must have the USB flashdrive inserted before you start the computer otherwise that option will not be shown on the one-time boot menu. Eg like mine...
Anyway, press F8 after BIOS starts to run.
hi, something you will learn as you help more ,is that if OP doesn't respond in 5 or 6 days they likely never will ,and just to say what was already said ,they are looking for a program to do all the work ,and the the links posted in this thread require user to do most of the work, good post ,keep helping, daniweb needs all th helpers it can get thanks
Listen there is no easy way to boot XP from USB. It wasn't designed for it. It resets the USB bus a lot and if the OS is paging it crashes. So Its almost impossible to make it work without major hacking. (Windows 7 maybe?)
What you probably need is WIN PXE boot from USB. Its not xp but its close enough.
Just google how to create a WIN PXE environment boot from USB. Then you can customize it to your liking. Not super hard but not point and click.
Cheater way might be to download GHOST enterprise demo and make a PXE boot USB then hack it out with other applications you want to run on it. Building it yourself is a worth while experience.
Let me know if you need better direction.