Ok

Here's a scenario ok.

You have an XP disk and a clean machine and you want to install XP to the stick so you can boot from that.

No problem

However why would you want to do that unless you intended to use the main internal hard drive as spare space?

Once you start installing programs the stick will be filled in no time.

If your thinking of loading XP to the stick and then using it between machines, forget it as the system hardware parameters on the given machines will not match up to the parameters on the stick.