When installing new components then it uses the following registry keys to find the Install-CD:

[HKEY_LOCAL_MACHINE \SOFTWARE \Microsoft \Windows NT \CurrentVersion]
Sourcepath = "D:\i386"

[HKEY_LOCAL_MACHINE \SOFTWARE \Microsoft \Windows \CurrentVersion \Setup]
Sourcepath= "D:\"

[HKEY_LOCAL_MACHINE \SOFTWARE \Microsoft \Windows \CurrentVersion \Setup]
Installation Sources = "D:\i386" (MULTI_SZ - Use Regedt32.exe)

More Info MS KB168645
More Info MS KB323003
More Info MS KB811260
More Info MS KB833615

Note that in WinXP one can use the PowerToy TweakUI to configure the source path. My Computer -> Special Folders -> Installation Path.

Note a new feature have been added to Win2k/WinXP that places the install files from the installed services packs in a backup-folder. This backup-folder is useful in these situations:

• When adding/removing components where the install-CD is used, then one don't have to reinstall the service pack, as the proper install files are available. (Something which caused many problems on WinNT4)
• When Windows File Protection have detected that a protected system file have been deleted or overwritten, then it is able to restore the correct file using the backup-folder.

Therefore if having deleted this backup-folder then Windows will start to complain, but it can be solved by re-installing the service pack. The following registry value specifies the path to the backup-folder (If the latest service pack was slipstreamed to the install CD then it should point to the root of the install CD):

[HKEY_LOCAL_MACHINE \SOFTWARE \Microsoft \Windows \CurrentVersion \Setup]
ServicePackSourcePath = "C:\WinNt\ServicePackFiles"

More Info MS KB271484
More Info MS KB329260

Note if having changed the install path to a location on the HDD/Network, and don't want to be requested for the install cd, when using SFC or Add/Remove Programs, then one have to set this DWORD registry key:

[HKEY_LOCAL_MACHINE \Software \Microsoft \Windows \CurrentVersion \Setup]
CDInstall = 0

More Info MS KB316565

Related Configure Drive Letter for the CD-ROM drive