I have come across two different methods for multibooting USB sticks. Method 1 involves using a bootloader with a USB stick containing one partition. Method 2 uses a USB stick containing multiple partitions, each containing their own boot sector.
Boot from your USB stick, copy winxp and boot from it. includes video tutorial inside on how to do it. works on my notebook with cdrom device. As the world is being taken over by Netbooks. This may come in useful. Netbooks are great but they have no CD/DVD drive with this you can Install a full size version of any XP onto a USB drive.
The following guide will create a multi-boot USB stick with options for Linux, Windows PE 2.0 and various floppy boot disk images, an additional options can be added. You will need a 512MB USB stick if you want to include all of the options in this guide (files take up approximately 312MB, leaving plenty of room for data storage).
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