Steps for creating a Windows PE disc
1) Download the Windows Automated Installation Kit (WAIK). Currently, there are two now:
a) Windows Vista WAIK for making Vista-based Windows PE 2.1 discs.
b) Windows 7 WAIK for making Win7-based Windows PE 3.0 discs.
I find the Windows 7 WAIK easier to deal with, so we're going to go with that one:
(also available from Geoff)
2) Burn the ISO to a DVD using your favorite burning software or mount it with CD emulation software to save yourself a disc.
3) Install the WAIK. Even though the instructions say that it will only install on Windows Server 2003, Windows Vista, Windows Server 2008, or Windows Server 2008 R2, it'll install just fine for our purposes on Windows XP.
4) Copy the batch files to your desktop.
5) Double-click each batch file in order from 1-MakePE_Directory.bat thru 7-MakeISO.bat, following the instructions along the way.
6) Burn the resulting ISO file in C:\PE\winpe_x86 or C:\PE\winpe_AMD64 to a CD using your favorite burning software.