No. nLite transforms a CD in an other (customized) CD. From its home page, nLite is a "Windows (XP) Installation Customiser". Independantly from the fact you want/need to use nLite or not, there are other tools to do what you want. Check for instance the "Install Windows from USB" forum on this board. Bootable means you can start a computer from it (or a virtual machine). In the old days of Win95, you had to boot from a floppy drive to launch the install that was on a CD. Also "make bootable ISO" is an option because not everybody needs an ISO, sometimes you just need the files for further customisation (or like, see above, to put them on a USB stick). Not that it takes time to make it, but it also takes few additional MB for the file creation. A "bootable Windows XP installation disc" is still (only) an installation disc. Not a live operating system. What you first did is use nLite on your bootable disc to bring zero customisation to a new disc, which is not exactly what you wanted to do. I hope it's clearer now that nLite is not at all what you thought it was.