Slipstreaming is the fixing of a bug or adding of enhancments to software withought identifying such inclusions by creating a new version number.
Newer versions of Microsoft Windows Operating Systems (2000,XP,2003) have the ability to integrate Service Packs and HotFixes into the initial installation of the operating system. You can use this method to replace the original source files with updated Pack files before installing Windows. When the operating system is installed, the Service Pack and Hotfixes are installed automatically.
For example suppose you have an original Windows XP installation CD without for example Service Pack 2. Everytime you successfully complete an installation using that CD, you need to go to the WindowsUdpate site to apply Service Pack 2 and other recent patches. If you are using the same CD to install on various PCs, this process can be time consuming. A more effecient way is by using your original XP CD, create another XP CD with SP2 as well as other patches already slipstreamed, meaning that upon completion of XP using the slipstreamed CD, the XP wprkstation will already have SP2 installed as well as the latest patches. See link below for instructions on how to do this.