OK. I gave up on trying to customize my bootable XP disc (see http://www.msfn.org/board/nLite-for-Dummie...l&p=792623) as I am just not smart enough to figure out all the options and there is no documentation.

So, I created a very basic XP with the integrated SP3 and burned the image. Started my install.
Would not let me install XP onto my SATA hard drive. OK. No problem, I will just use my PATA HD for XP instead (and rearrange how I was going to divide up the drives).

Got to 44% done and got an error message that says, "Setup cannot copy the file: winntbbu.dll"

How do I resolve this problem?

You are probably integrating SP3 in a 2nd or 3rd nLite session or starting from an already modified CD. You need to integrate SP3 to an original CD, with or without nLite. Then you can use nLite a second time if you want or need it.

Did you alter that file? If so, did you run ModifyPE on the file when you were done, before recompressing it?

So, I use this ModifyPE program in the file before I create the ISO image with nLite? If so, where do I look for the file that nLite is using to make the ISO?

You only need to use ModifyPE if you changed the file yourself, with a hex editor or other tool. If you did not edit that file then your problem is elsewhere.