From what I've read you can't just install windows to a CF card. This part of granturing.blogspot is what you really need to read and use:
You want to get your XP installation as small as possible so that it can fit onto a CF card. I recommend using nLite. Most likely you’ll have to choose between a 512MB or 1GB card. Do some research and try to find the fastest CF card you can afford. I’ve only used SanDisk Ultra II, Extreme, and Extreme III cards. Keep in mind that if you plan on using hibernation, your space requirements will increase by the amount of RAM you install in the system. So if you’ve got an XP installation that takes up 320MB and you’ve got a 256MB stick of RAM you’ll use up about 576MB of space. You’ll need to get a 1GB card, but if you don’t need hibernation you can make do with a 512MB card and save some money. You’ll also need to buy a CF-IDE adapter. Do a search on Google and you’ll find quite a few different adapters out there. The cheaper adapters out there may not support the faster speeds of the SanDisk cards. I’ve used adapters from acscontrol.com and logicsupply.com. The best way to go about this is to first set up your system on a regular hard drive. Load up all your drivers, 3 party tools, make configuration changes, and of course install EWF and MinLogon. Once you’re happy with the system you need to initialize your CF card. Microsoft recommends using a FAT file system to improve the performance of EWF and minimize writes to the drive. You may have no choice depending on the type of CF card you get. Off-the-shelf CF cards come configured as removable drives and can only be formatted as FAT. Windows XP will not allow you to partition and format a removable drive with NTFS, so you must use FAT. You can sometimes get a special utility from the manufacturer to configure the drive to be fixed. XPe includes a special tool called Bootprep.exe that is used to make FAT formatted disks able to boot into Windows XP. To setup a CF disk using FAT you’ll need a DOS boot disk with fdisk.exe, format.com, and bootprep.exe.
1. Start by installing your CF card as the master drive on the primary controller and your hard drive on the secondary controller.
2. Boot into Dos and partition your disk, then format it using the command “format c: /s”. This will set the disk to boot into Dos. Do this first to make sure your BIOS and CF card are set up correctly. Reboot, and if all goes well the system will boot into Dos from the CF disk. If not then you need to check your BIOS settings.
3. Once you’ve confirmed that your CF card boots successfully, reformat the card by just using “format c:” (no /s switch) and then finally run Bootprep. The command for Bootprep is “bootprep /dc” (the /d switch specifies which drive to use).
If you are using a fixed disk and plan to use NTFS then just simply use Windows Disk Management to partition the drive and format it.
Now you are ready to copy your XP install over. Use whatever method you prefer, whether it’s booting into Knoppix, Dos, or another XP installation. Just make sure that you copy all hidden and system files and keep the attributes intact.
Once the transfer is done connect your CF card to your system, remove all other hard drives, and boot up. As long as all the files were copied over properly it’ll start booting into your XP install just as it did from the hard drive. Once the system boots up take a look around and make sure everything is working right. Bring up a console and check that EWF is running. If you’re going to be making significant changes to the system you may want to consider doing it on the hard drive first and then redeploying to the CF disk that way you can clean out log files, temp directories, and any other leftover junk that’ll take up precious space on your CF disk.