Need help with the following:
I need to make a Live XP DVD with all driver packs slipstreamed.
Also, I need to make a shortcut (either on the desktop or startmenu) to an executable on the DVD.

Try using the OPK from MS - you need to register. This is only legal if you're a system builder, or build youur own computers. You can also get them when you buy 3-packs of OEM Windows Discs.

There is a much easier way.

Try UXP, it will include all available driverpacks with a one-click process: http://www.msfn.org/board/project-uxp-t113249.html

Will also include a LiveXP environment, suited for recovery and maintenance tasks - a bit like ubuntu works.