eyespy, hi, if you want to reduce bloat have a look at nLite. What you propose is impossible because as cgthamm has already said the latest service pack needs to be installed for you to be able to install the latest security updates, note updates not hotfixes, there is a difference that you probably need to understand. Basicly hotfixes don't contain security fixes, they are bug fixes only. There are other differences but I won't go into it now, you can look it up for yourself aswell if you like.
Even with the latest service pack and security updates offered by windows update installed XP is not secure and you shouldn't be using it on an internet connected PC. The best AV/Firewall in the world can only do so much, if the underlying OS in insecure your still vulnerable. Also, the hack to get XP Embedded updates to install on XP only gives you a false sense of security, it doesn't guarantee security of the OS and may even make it even more insecure and/or unstable.
If you wish to continue on your quest to reduce bloat I would grab nLite, you can use it to first create a disc image that has the latest service pack and all available security updates on it (it'll still be unsecure), then to strip out the bloat.
If you only have XP gold (RTM), to avoid problems first slipstream SP2 then SP3. Service packs are cumulative but Gold to SP3 doesn't work as well as SP2 to SP3. You will also need grab all the security updates, a list of which you can get from running windows update on a fresh install of XP with SP3 installed. You can then download them from the microsoft download centre and point nLite at them. At this point you can then strip out the components you don't need. I used to reduce the ISO down to about 110MB.
While you cannot get a secure XP you can get a less bloated one by approching it in a different way. TBO though, it's not really worth it, just grab W7 and move on, I put it off right untill XP support ended and while I do miss some aspects of XP I wish I'd switched sooner. W7 has it's shortfalls but a few apps and tweaking is enough to make it usable. 64-bit support was welcome too aswell as all the other small improvements.
Anyway I hope that's helped more than hindered. Good luck.