A while back I documented the process for doing a Sysprep on a Windows 2003 installation. Well, that same process works for a Windows XP installation. The sysprep GUI on Windows XP is slightly different, but you only need to make sure that the “MiniSetup” and “Pre-Activate” options are selected before pressing the Reseal button and shutting down the machine.
Here are the instructions to run Sysprep on Windows 2003.