Microsoft finally addresses an issue some Windows XP users have had in slipstreaming Service Pack 3 (SP3) into their installation media:
This blog entry covers a issue that some customers have encountered with the release of SP3 for Windows XP. The service pack supports the use of the /integrate command to integrate(or also called slipstream) SP3 into a Windows XP flat. It is supported to run the command with the following media
Windows XP Professional RTM
Windows XP Professional SP1
Windows XP Professional SP2
The problem arises if the /integrate command is run under Windows Vista or Windows Server 2008. The /integrate process will not report any error and appear to work but if you try to install from the media your product key may not be accepted. Luckily the fix is easy. Run the /integrate command under Windows XP or Windows Server 2003. For more information around this issue see http://support.microsoft.com/default.aspx?scid=kb;EN-US;950722
Related: My preliminary XP SP3 Slipstreaming Guide