Windows Booting from USB stick - the hard way

I was about to retort that a bootable USB pendrive was the obvious solution to replace floppies, but is there an easy way for Joe N00b to make one from XP?

I can't find a way that doesn't rely on 3rd-party software.

1. The HP Drive Key Boot utility will format the pendrive but needs a source for the system files. They must be hidden somewhere in a basic XP install, but IFIICFT.
   
2. Windows Enabler will over-ride XP and ungrey the 'Create a MSDOS system disk' option in Explorer's Format. The bad news is it limits your stick's capacity to the same as a floppy.

Microsoft themselves think a bootable USB stick is a great idea;

So why no MS patch for XP to make it at least possible for a n00b user to create a Rescue Stick?