Since you're using nlite, have you already tried the method used by microwinx?
http://microwinx.com/They create a XP based build (not PE) also sized around 50Mb, it's not using explorer shell or anything else added, but the result is very similar to our liveXP project and it will surely be easier to tweak with all the experience gathered from PE environments.
Don't be afraid to place any doubts you have regarding the script syntax or anything else in wich you need help - This is a really promissing project..