I got this idea from the size reducing tutorial. Windows XP makes the two hidden folders in the C: partition, right? Well I just wonder if it would be possible to boot up in winpe, copy the two folders exactly as they are to the hard drive, and reboot, and thereby going directly into the graphical setup...?

Yes it is.

If you search the forum, you may find and old thread by gosh about burning a CD with these 2 folders, so you won't even need winPE.

... and thereby going directly into the graphical setup...?

I think it should be [... and thereby going directly into the second phase of copying...?]

I hope I am correct..