Slipstreaming a service pack is the act of taking old Windows installation files and creating a new installation that is updated with the latest service pack. For years, I have been manually slipstreaming Windows service packs, but I recently discovered a new tool that takes all of the grunt work out of the process. nLite will walk you through the process of slipstreaming your Windows installation. It even has the ability to include later service packs in the installation, remove unneeded components, create a bootable CD image, and many more features.

The application is free and can be downloaded here. You may also want to check out a tutorial on how to Slipstream Windows XP SP3 CD.