After doing a bit of research, I found we're both correct in a way, but more so you.
XP with no service packs has the 137gb limit, but anything which is SP1 or above doesn't have that limit. Personally I didn't have to slipstream my XP disc with SP2, as it came with it on.
So to make this clear sjh20502, if your XP disc has Service pack 1, 2 or 3 on, then you won't need to slipstream anything, although I recommend you upgrade to Service Pack 3 when you have installed. However, if you have one of the very original XP discs then you will need to go through the process of slipstreaming, and the link donkey sent you is helpful.