i read in both nlite and vlite sections
that if XP ISO is nlited under vista OS and vista ISO under XP OS
that installing such installation goes wrong and people recommend
to nlite under XP and vlite under vista

so is this some OS rule or some limitation or doesnt have to be like that ?

you shouldn't have any problems using vlite in xp to vlite vista! if your xp is 32bit then you could only vlite vista/7 32bit!

thank you