After burning 3 cds and reading number of in-complete articles about creating bootable CD, i was finally able to learn the procedure of creating a bootable cd with XP. And now sharing which would save your time and CDs.
I used Nero 7.11.10 to create bootable CD.
1) Start Nero Express
2) Click on button with left arrow that would turn right on click.
3) Click on Switch to Nero Burning ROM and in meanwhile download boot.ima (Click on the link)
4) From compilation list select CD-ROM(Boot).
5) There are 4 tabs that needs to be configured as follows
a) Boot Tab
For boot image , give the path of the boot image that you downloaded in Step 3 and configure the rest of the configuration for boot tab as shown in image below
b) ISO Tab: Configure as shown below
c) Label Tab: Configure as shown below
d) Burn Tab: Configure as shown below
6) Now click on New and drag the contents of your original XP CD into the project for burning and click before you click on Burn re-check the four tabs.
I hope this will save few of your cd's and time.