Windows XP Embedded with Service Pack 1 introduced the Remote Boot feature. With Remote Boot, you can create a client device that does not require a hard disk or other persistent storage device. Instead, your client device can download a runtime image from a network server into the client's system memory (random access memory -- RAM); the memory-resident image becomes the system startup device and is...
subsequently started. This technical article on Microsoft's MSDN website contains guidance for deploying and troubleshooting Remote Boot. Read the article here.