You can install Windows XP on a USB pen so that you can troubleshoot problem or take your office with you. FTA, "...All it takes is a minor error in the Windows Registry or a virus infection, and your operating system can become unbootable. But with a properly configured USB flash drive on hand, you'll always have a compatible replacement no further away than your pocket or keychain. In addition, the flash drive can also provide a secure browser and virus scanner, and lets you take your favorite DVD burning and Office software with you wherever you may go.

Why would anyone want to install Windows XP from a pen drive?

• Some Laptops like asus eeepc, acer aspire one, hp mini etc don’t have CD-drive
  
• May be their CD drive isn’t working properly like mine, or
  
• They don’t want to waste money on a CD

More over installation from a flash drive is faster compared to a CD.
Before we go on with the tutorial here’s what you’ll need

Requirements

• USB flash drive, 1GB or larger
  
• 1 Windows XP installation disc
  
• Assorted files that I’ll describe as we go along.
• Windows 7 or Vista ISO
• Pen drive with 4GB+ (2 GB is sufficient for XP)
• 15 Minutes of free time