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1) They are probably including all the debug symbols.
2) XP used to come in a CD but that doesn't means it "fits" in a CD. Back in 2001, there were not too many DVDs. For XP, Microsoft probably had to take out many things. Specially weird drivers, but there's also many "kits" that you had to download from Microsoft's web page.
Now that DVDs are really mainstream, Microsoft can afford to put a DVD of crap there. Extra drivers, for example. Who cares, really? - it's just one DVD