It is a good idea to make a backup (e.g. using ntbackup.exe) of the source's registry, before proceeding with the following preparation: Open a terminal and tap "regedt32.exe" to open the registry. Navigate to HKEY_LOCAL_MACHINE\SYSTEM\MountedDevices. Remove all entries! (I usually leave my optical drives J, K and L) The history of drive letter assignments will otherwise confuse at the target's first boot.

Now boot another drive and copy everything (e.g. using Windows Explorer) from the source to the target, and add a Windows XP bootloader, e.g. using the command console of the source, with the commands "Fixmbr" for a drive or "Fixboot" for a partition.