The short answer to your original question is yes...with provisions. You need a burning client that can create bootable disks. Without that you are pretty much SOL.
Here are a couple guides:
http://www.helpwithwindows.com/WindowsXP/winxp-sp2-bootcd.html
http://www.theeldergeek.com/slipstreamed_xpsp2_cd.htm
Basicly what you are going to do is:
1. Copy all the files from your CD down to a dir on your hard drive.
2. Download SP2 from MS
HERE
3. dump the XP2 files into the dir you downloaded to.
4. Run the XP2 installer with a switch. Its in the guide above.
5. Using an app like ISO buster extract the boot "image" from your original CD into a dir on your computer.
6. Using a burning util like Nero Burning ROM or Easy CD creator create a boot CD with the "image" you extracted, and burn the original upgraded files back onto a CD and you should be done.
Its not as complex as it sounds. Just follow the guide that I linked to above.
PS- Make sure you turn off the option in windows to hide hidden files, along with hide OS files before copying the files from the CD down.