Installing the Windows XPe —

The installation files come on 4 CDs.

Includes the database of Windows XP components. This is installed in a MSCE (older version of SQL-Server Express.) The installer doesn’t appear to be smart enough to use existing SQL-Server or SQL-Express that may be present from other Microsoft Developer products.

Once the database engine is installed, it then puts in the components. These include all of the third-party hardware drivers that are included in Windows XP… even things like support for U.S. Robotics modems.

Once XP SP1 is installed, the SP2 is installed over it. This updates the Windows binaries, and refreshes the database.

Install includes a remote boot service which allows PXE and TFTP updates to remote devices. This could be interesting, as it would allow automatic updates to deployed devices.

Working through the tutorials, it assumes that you want to incorporate a “Hello World” .exe file into the final image that is to be loaded on the target hardware. The sample file is a simple .exe which uses the Microsoft C runtime. Both of these items are packaged as a “component” by using the component designer.

Component files are stored with an .sld extension
Configuration files are stored with an .slx extension

Microsoft touts XPe as having the ability to run existing Windows applications without having to port (rewrite, or recompile) the application. Still, assuming an application requires registry entries, when it is installed, you have to figure out what all the registry entries are, and how the application is configured.
MSDN to the rescue:
http://msdn2.microsoft.com/en-us/library/ms838332.aspx

The Configuration Manager includes several pre-configured devices, including:
Kiosk,
Network Appliance
Rich Media Player
Basic Media Player
Set-Top Box