Making a bootable USB Drive from an .iso
The simple process is to use Apple's Bootcanp to handle three problems you face in booting from windows:


Partitioning your internal drive (you can skip this - it's what Bootcanp wants, but purely optional)
Supply drivers - XP almost certainly won't have correct drivers for new Macs. Since you didn't mention your hardware, it might be old enough to not matter. 
Ensure the Mac EFI sees and initiates boot - this is where making a bootable USB trips up most users. 


You'll want to look at a tool like rEFIt, rEFInd or bootrunner since just burning the image onto USB is not enough to boot foreign OS like an XP live CD image. 

If that image doesn't include an EFI aware boot loader, you'll need to modify that ISO and wrap it in a boot loader such as GRUB.