The SFC will not overwrite existing hotfixes or Service Pack files.
SFC in Windows XP will look in Windows\ServicePackFiles\i386 for updated files.
The XP CD is only required for core files that have not been changed by subsequent
Service Pack updates.

As long as you did not delete the Windows directory that contains the
downloaded Service Pack files, SFC will use the updated SP files when
running SFC.

MS-MVP Kelly Theriot has the explanation you are looking for.
Visit http://www.kellys-korner-xp.co­m/xp_s.htm   and scroll way
down to "SP1 - System File Checker".

1. Go to Start > Run and type:  CMD  , and hit enter.
2. In the Command Prompt window type: SFC /SCANNOW
   and hit enter.  Have your Windows XP CD available.

After running SFC:

Go to Start > Programs > Accessories > System Tools >
System Information > View > System History

"File Signiture Verification" Checks and make sure your files are in their
origional and necessary form. Restores files, I do it about once a week when
I see alot of trojan activity or any applications currently installed or
uninstalled that may have altered the origionals, I think it makes my
computer run smoother