The Windows XP CDRom can be any of the following versions :
You don't have to provide the CDRom itself. A complete i386 directory is enough.
Both XP Home and XP Pro are supported.
You need an access to the web for the Generator to download needed stuff, and proxies are supported.
Latest available Service Pack is streamlined.
Latest Microsoft hotfixes are downloaded and added to the DVD too.
MUI Language Packs are added to the DVD if your Windows version is the English one, so you can choose the available languages your future Windows system will offer.
More than 1 Go of recent drivers are added to the DVD.
A lot of up-to-date software is added, including :
Microsoft .NET Framework redistributable 2.0.5
Adobe Reader 7.0.5 with multi-language support
Open Office 2.0.1
Many codecs and multimedia layers / rippers
Microsoft .NET Framework SDK 2.0.5 (optional)
The GIMP 2.2.9
Messenger with Messenger Plus and SPNG
The DVD you'll build will be bootable.
The DVD launches a Linux-based OS, which raises all necessary questions at first, and raises no more question afterwards.
You can choose either to format your hard disk, or to preserve data on it. In this case, there's no formating at all. An old "Documents and Settings" folder is renamed "Documents and Settings.OLD", and only C:\Windows and C:\Program files folders are erased.
There are ways to integrate everything in a PXE/RIS server (even the Home version of XP, in fact). Documentation about this should be available soon.
There are ways to customize more deeply the making of the DVD. Documentation about this should be available soon.