Both nuhi and RyanVM has stated that if you're gonna use nLite anyway, after having integrated the RVMPack, then also use it for integrating the RVMPack also(and in one pass too)...
However, as there's now SP3 out for WinXP, then i would recommend using that, instead of a post-SP2 update-pack...
I would also, just like crahak, recommend that you use the '/integrate' switch to slipstream SP3 into your install-source, but i wouldn't recommend using that switch for the post-SP3 updates, as HFSLIP and nLite does a much better job of that...
The reason being that the '/integrate' switch will besides replacing the outdated binaried with the new updated ones, also leave the new updated ones uncabbed, even though they where originally cabbed, and then also copy the installers into 'I386\svcpack\' and reference them all to be run at T-13 to get the needed reg-entries and occasionally post-install commands like e.g. registering new files etc..
Also, there's some different post-SP3 update-packs available, if you're into something like that...
I used to be a very enthustiastic user of such packs myself, but have now instead gone over to preffering to just get the updates straight from MS on every patch-tuesday, and then directly integrate them with HFSLIP(or you could use nLite), instead of relying on others work and what they happen to think should be included and their release-schedule etc...
Now about VM's, then VirtualBox seems very nice as it's lean and unbloated, but i unfortunetly cannot use it, as i'm getting an error about not being able to allocate enough memmory(i also only have 256mb RAM)...
Then i instead used VMware Workstation v6.0 for some time, and allthough it worked fine, then i hated how bloated and consumming it was, so i'm now gone over to using VMware Workstation v5.0, as that's much leaner while still fullfilling all of my purposses and only being about 78mb compared to the 250mb or more of v6.0...
Instead of the expensive VMware Workstation, then you could instead use the free VMware Player together with a vmx maker like e.g. the online
easyvmx.