Do you mean, can we install windows xp from an iso file using pxelinux?
If so, yes but you need to use memdisk in conjunction with winvblock driver, you need to understand that booting an iso file in PXE loads the iso into RAM, which you need memdisk to do. You also need a Windows Driver, winvblock, to read the iso in memory.
The best way is to create a winvblock floppy image (.ima) and use F6 to install the driver (in windows setup). Then install. On the second reboot you need to boot from harddisk and not iso, but you need to mount the iso the same.
For more info
http://pxe.dev.aboveaverageurl.com/index.php/PXE_Booting/Windows_2003
http://www.msfn.org/board/topic/149675-install-xp-from-a-iso-file/page__st__20
But was this your question?