nLite (vLite)

I just recently did a post-SP3 Win XP CD with nLite and didn't run in any (major) problems. Downloaded MSDN version of WinXP with SP3 integrated (1), then used user_hidden's update pack (2) to integrate post-SP3 updates via nLite. Image creation worked for me as well (I test the images with VirtualBox).
nLite is more or less discontinued AFAIK, but you will still get support at forums like wincert.net, ryanvm.net, or msfn.org (3).
I also found the list of available addons at wincert (4) very convenient.
I run nLite on Windows 7 64bit.

This was/is my first custom XP CD and I found it pretty hard to find up-to-date information on that topic - many tools and solutions are discontinued and/or outdated, as are many tutorials on the net. I guess the 'scene' has finally moved on to Windows 7, fortunately!

(1) http://www.tipandtrick.net/2008/windows-xp-sp3-with-service-pack-3-full-installation-cd-iso-image-relased-on-msdntechnet/
(2) http://www.wincert.net/forum/index.php?/topic/7118-addon-xpsp3-qfe-updatepack-for-windows-xp-post-sp3-20100825/ AND http://www.ryanvm.net/forum/viewtopic.php?t=7184&sid=600aeb3b9a99f16f92e1b01bae6732c9 AND http://www.ryanvm.net/forum/viewtopic.php?t=8247&sid=e243ca5face5169cdb37e8dde4c5f1e0
(3) http://www.msfn.org/board/forum/89-nlite/
(4) http://www.wincert.net/forum/index.php?/topic/339-wincerts-complete-list-of-add-ons/

Using nLite with its great individual settings for XP-CD configuration:
The following things are important: nLite must be installed in Win XP, not in Vista, copy the XP CD with SP2 and
SP3 in a local folder, not a network folder to ensure writing access to every single file.
The UpdatePack with Win XP Updates after SP3 may not be integrated in nLite procedure as a hotfix, but
added in a CD-folder at the end of nLite procedure. I had no success with creating a bootable ISO-file with nLite.
But if I burn the Win.XP-folder with integrated SP3 and individual configuration with help of nLite with ImgBurn with the method from par. (1) and (2) I successfully created a bootable ISO-file. Get the Boot.bin-file as described in the links from WinTotal as a download from WinTotal, not with nLite-Method, which does not work.
My detailed settings of ImgBurn you can see in
(a) https://docs.google.com/fileview?id=0ByvxTfksVxTsMGY4M2Q3YWItYjRiOC00MzIzLThmMzQtZjdkMjI1NDFlZjhj&hl=de

I never could burn a bootable ISO-file with integration of WinXP-SP3 in a WinXP-Installation-CD with nLite:
The result with all with nLite generated ISO-files was an error message at the beginning of XP installation "Hardware Configuration - NTDETECT failed":
I had a good experience to make a bootable Win.XP-CD with integrated SP2 and SP3 with instructions from http://www.wintotal.de/ :
(1) Integration of SP2 into a basic WinXP-Installation-CD without any Service Pack:
http://www.wintotal.de/artikel/artikel-2004/7112-windows-xp-installations-cd-mit-integriertem-service-pack-2-erstellen.html
English translation: http://bit.ly/cppRGH execute PathSP2:\xpsp2.exe /integrate:PathXPwithSP,
Both PathSP2 and PathXPwithSP must be on a local directory (best would be C) with full writing access, no network folder.WinTotal recommends Nero for burning the Win XP Installation CD with integrated SP2, I do not like the bloatware Nero and burned it with nearly equal settings with ImgBurn:
http://alternativeto.net/desktop/imgburn , configuration in detail see http://bit.ly/cqqgMA.
(2) Integration of SP3 into a WinXP-Installation-CD with SP2, created as written in (1):
The procedure is quite equal as the description in paragraph (1):
http://www.wintotal.de/artikel/artikel-2008/185.html , english translation : http://bit.ly/bM2MTU
The burning of the bootable CD-Rom I also did with ImgBurn: http://bit.ly/8Yr5W3