copy xp disc to C:\xpcd
install nlite (and .net 2 framework to run it)
download the ~270mb sp2 file, point nlite at the c:\xpcd folder, select Service Pack Slipstream, then point it at the sp2 exe
select the make iso page too in nlite, then use that to make your new xpsp2 cd
then reboot pc with new cd in, format partitions, and install xpsp2