Not sure what you are getting at.
Firstly, I am not sure if installing Windows on a Mac, whether on a separate partition or in a virtual environment, doesn't contravene any EULA's. But I will let others talk about that.
Next, if you only have two Windows upgrade disks, that is not going to work. They don't install Windows, but just upgrade it.
You're right to look into Slipstreaming, (Google Slipstream XP for more information), but you will need the original XP installation disk to do it.
Or did I miss something in your post?
I have been upgrading windows for years and can't remember the last full version I bought. Now I have win ME upgrd. and a XP upgrade, and I want to install on a VMware fusion partition on my intel mac. But I guess it doesn't like the two disc proceedure. Is there a way to combine the two (me & xp) so I have one full installer? (I've heard the word slipstream bandied about. )