I recommend slip-streaming with SP3. I have done this job and used my XP-SP3 on a wide range of computers from very old (Pentium I) to very new (Athlon II) and never had any problem. Though Windows 7 is better, but XP has a few advantages of its own and regarding your friend's needs he may be right. I personally use different windows versions (95, 98, XP, 7) on different computers; Each one has its own advantages.