You start by running BootCamp Assistant in
/Applications/Utilities
It will need to find xx-GBs of free unfragmented space. If it can't find a single chunk, it will fail and you will need to backup, reformat, and restore from TimeMachine or another backup - so you need to have an external drive handy and OS X backed up.
BC Assist. will ask you to insert your Windows XP disc and install just like any normal OS install process.
After Windows XP SP3 is installed, updated through a couple restarts usually, THEN you insert your OS X DVD and there is a hidden partition just for BootCamp where there is Apple Setup.exe that installs drivers, services, and control panels. BootCamp OS Switcher, Apple Software Update, support for keyboard and mouse etc.
One of the first updates will be Apple Software Update control panel that improves on downloading future updates.
If you already downloaded BootCamp 2.1 update package, you can copy it over while in OS X or put it on a USB memory card etc.
Print out or read the BootCamp manual pdf.
http://www.apple.com/support/bootcamp/