Im not sure if this works for you but I've done this for a few netbooks, make sure you back up all your stuff on the laptop and USB before you begin this,
1. If you have a PC that you can work on
2. Does your PC have an ISO reader? (virtual drive like daemon tools or similar), If you do proceed to mount the ISO image to the virtual drive.
3. Download USB MultiBoot 10
4. Extract the contents and run the USB_MultiBoot_10 file.
5. Type 'H' for USBs larger than 4 GB, choose NTFS in File System and click 'Start' to format your USB, make sure your USB is backed up if there are important stuff.
6. Then you'll be loaded to another page from the Command WIndow.
7. Press 1 and 'Enter' to browse your Virtual CD (where your ISO is mounted)
8. Press 2 and 'Enter' to put your destinaton of the XP files, namely your USB.
9. Press 3 and 'Enter' to Initiate the copy and a window will pop up to make your installation unattended (meaning it will do all the name, serial number, timezone and etc without you present for the installation)
10. Restart your PC once its done and boot it to your USB and choose the 2.Boot with TXT setup (something along those lines it was a long time since I did this)
11. Just follow the setup and BANG, your XP will start to install.
12. Once it restarts your have to boot to your USB again but this time choose option 3. and BOOM, your XP will install all the way to login screen.
Here is a video (long video about 21 mins) if the instructions seem to hard to follow,
, bear in mind that they choose the P method since they use a 2GB usb, in your case you got a 8GB USB I'd suggest you use the H on step 5. but other than that just follow the same steps and you're good to go.
This is lengthy and its more suited for moderate users, I hope this helps.