how to create bootable pendrive in XP

Try Novicorp WinToFlash. I have used it and it will work with both WinXP and Win7.

Another alternative - Rufus

Agree wid osthe. Use wintoflash. WinToFlash - Install Windows from usb - Laguage selection After creating the bootable pen drive u need to enable boot from usb in the bios.

I've tried it , it works just about ok. You'll most probably face issues. i used win2flash