I was wondering if it is possiable to make a restore cd that has all my programs I have loaded on my computer so I don't have to install each and every program individually again. I want to be able pop the restore cd in my computer with out having to install everything else.

Is that possiable ? If so how do I do it ?

Drive Image/Ghost 9(brand new from Symantec)
It makes a complete image of all your drives.Save them to all kinds of Media and can restore all or part of your system.

Or yo can use Acronis TruImage.

Whatever you use, be prepared to use more than one CD. WindowsXP SP1 on it's own has to be stripped to it's bare bones to fit on a single cd at 1-1 compression (See this post by Soul Harvester). It's probably a good idea to carefully choose which programs you want to put in the image to keep the number of disks to a minimum, for example, you'd want to include any drivers that you have to manually install, maybe ms word/ms office if you use it a lot, etc...

I would install any applications that you have purchased that require Internet Activation to "unlock", I have several of these programs that I have purchased Microsoft Plus DME, Comic Collector, Movie Collector, etc. That way you won't have to call them up if you "activate" too often and explain why.

I use drive image for this purpose.

If you have a DVD-Rewriter you can use that to make a restore DVD, using Ghost, it works just the same except you can fit 4.7Gb of stuff on instead of 700Mb.

With regards to cutting the sizes of XP installations, I highly recommend NLite http://nuhi.msfn.org/ , which allows you to remove bits of windows you never use from the installation source completely.

Alternatively, by following the guides at http://www.msfn.org you can learn how to create a Slipstreamed Windows CD which installs all of the latest Windows Updates, Drivers and Applications.