Windows XP cannot be booted from a USB flash drive-at least that's what Microsoft says. We at CHIP beg to differ; here we generously share a few tips and tricks to establish that it can be done.
The only condition is that motherboard and BIOS must allow booting by a USB flash drive. This feature is usually found in newer motherboards but for older models, a BIOS update should solve the problem.
With these tips and tricks, you will be able to come up with a standard bootable version of Windows that includes hotfixes, service packs and important utilities such
as recovery tools all loaded into your USB flash drive (aka USB pen drive, USB thumb drive and USB stick).
According to Microsoft's EULA (End User License Agreement), you are allowed to copy Windows XP to external media such as USB flash drive as long as it is used for your own Pc.