I have just done this and USB is OK, there is a link below.
http://wiki.eeeuser.com/windowsxpusb
But I assure you it is much easier to get a USB to DVD dongle attach a DVD, Using a SATA DVD, works great. set to Boot from USB-DVD and it will be simple, also download the EEEPC XP disk, it install a special XP for the EEEPC and has all drivers.
There is the torrent links for the ISO, download and burn to DVD If you already have it then it is all moot.
http://www.torrentreactor.to/torrents/download/1585860
http://dl5.torrentreactor.net/download.php?id=1732907&name=Windows+XP+sp3+Lite+for+ASUS+eee+PC
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