Slipstream copy of Win2k with SP2

a recent TechRepublic tips e-mail explained how to create a slipstream copy of w2k with sp2 to avoid the second setup pass on a w2k install. I’ve tried this and created the updated I386 folder, but can’t seem to figure out when this new folder is used during the install. If I’m doing a clean install on a new machine what are the install steps and when is this new updated folder introduced in the install process?