Hi!
You can use something like nLite to make a slipstreamed cd with SP1 (and tell your friend next time he should keep his PC updated)
1. Download and install
nLite.
2. You'll need the XP cd, the service pack 1 executable and an empty cd
3. Follow the instruction on
this guide (or google "slipstream nlite") and choose from a billion of other guides.
4. Once you've created an image, burn it to a cd and that's it.
If you need any help during the process, just ask.