- Format a USB key as described in my earlier post
- From a computer with a DVDROM copy the Vista media onto the root of the USB key
- I used vlite (http://www.vlite.net/) to create a cut down vista image.
- Boot and select USB as the boot option
- Vista kicks off its install.
EDIT: Before you blow away your XP image make sure you copy the drivers folder and then copy it back t0 your USB key after you have installed Vista.