Q:   I wonder if there is any way so that i can take a backup of the service packs which have been downloaded and installed using windows update feature so that I can apply them again later in case I have to reinstall (clean install) XP again. So that I need not have to download and install them from the start.

A:   To download the Windows Update fixes / installers locally, you can use the Windows Update catalog. (You need to download them once using the WU Catalog.)

These links should help.

How to download updates and drivers from the Windows Update Catalog or from the Microsoft Update Catalog:
http://support.microsoft.com/?kbid=323166

The following links explains how to integrating the Service Packs and the Hotfixes with the Windows XP CD-ROM (called as Slipstreaming). The greatest benefit of slipstreaming is that you don;'t need to re-apply the Service Packs and Hotfixes again after performing a clean install of Windows.

Slipstreaming Windows XP with Service Pack 2 (SP2):
http://www.winsupersite.com/showcase/windowsxp_sp2_slipstream.asp

[Automated slipstreaming] AutoStreamer 1.0.30:
http://www.majorgeeks.com/download4444.html

Windows XP Service Pack 2 (Full download)
http://www.microsoft.com/downloads/details.aspx?FamilyID=049c9dbe-3b8e-4f30-8245-9e368d3cdb5a&displaylang=en

MSFN's Unattended XP CD - Hotfixes - /INTEGRATE Method:
http://unattended.msfn.org/beginner/hotfix/integrate.htm