let's explore a little deeper...

during windows setup M1...
M1 has a path limit of 4096 (way light of what DriverPacks needs)
M1 uses the suggested MS path method - in winnt.sif
M1 extracts the 7zip archives and cab compresses the drivers.
Since windows natively supports cabbed drivers...
Simply haveing them on the CD/DVD (ODD) enables the manual option of "Search removable media"

  with SAD M1...
  Most of the time Search removable media will be all you need, 
  search the ODD once and be done.

During windows setup or SAD with M2...
M2 uses the registry entry for the devicepath, allowing for a great deal more entries than M1 / winnt.sif
7zip gives better compression than Cabbing - but must be extracted before use
M2 will allow for all connected hardware to be detected and drivers installed properly during setup.

  With SAD M2
  drivers are extracted to the HDD first then runs DPInst.exe then runs the finisher.

If you had either a M1 OR M2 disc with you i would simply run DP_Inst_tool
Since doing that will update all the drivers, not just the missing ones
and if there are any known issues with the drivers then the finisher will address them

KTD does not call the finisher so some drivers may not install properly (video and audio mostly)

The ISO will have a slipstreamed copy of the drivers plus a SAD M1 folder with the same drivers. After having copied the SAD M1 to HDD and having run devpath for this, Windows will then use the HDD SAD drivers whenever a new device is added to the system; however, the SAD drivers cannot be utilized as part of the normal Windows installation process. Right?

I can see now why I should simply create a pure SAD ISO. The way I imagine this disc is with a small script that will perform the copy process to the HDD and then run devpath. I was invisiging placing the SAD drivers at %systemroot%\SAD. Could the additional few characters in the path cause a problem?

Am I also right in saying that there is no reason why the SAD copy on the HDD cannot be replaced from time-to-time assuming one runs the devpath tool following this? (Is it possible to end up with void paths from this process or does devpath clear the search path first, i.e., does it completely replace the search path or does it simply append to it?)

this is pretty well outlined and asked and answered in the other thread...

Cant make it any easier than that

I would like to State again KTD  Most of the time  is a waste of disk space,
because If you are installing hardware you are going to be at the machine anyway...
It is always desirable to check for a better driver at the time of the hardware install.

I have very similar requirements to http://forum.driverpacks.net/viewtopic.php?id=3586, that is, my ISO installs everything to the HDD and makes it all available whenever it is required. This currently means copying the whole installation DVD as part of the Windows installation process to the destination HDD. My following MSFN post, albeit with a few issues, shows what and how I used to do this: http://www.msfn.org/board/index.php?showtopic=123972.

Now comes the SAD part , I used to rely on KTD , but, as we all know by now, this is not the best way to do things anymore. The problem is that I don't understand how I can utilize SAD to achieve what I want to achieve no matter how many posts I've read on this topic. (The http://forum.driverpacks.net/viewtopic.php?id=3586 post, for example, seems most relevant but then appears to run into an issue with the suggested process and then stops at that point.)

The problem is not getting the files onto the HDD (or the DVD for that matter), as I already do that, the problem is really a lack of understanding on my part of the SAD process. Here's my understanding so far - please feel free to correct me as I'm sure to have got a few things wrong...

As I understand it, SAD does not mean that Windows (all references to Windows refers to Windows XP) will automatically utilize the available SAD drivers at installation time so one has to trigger the SAD "installer/updater" as part of the Windows installation process. Assuming this is true and that I'm triggering it at the right stage during the installation process, will Windows then utilize the SAD drivers even for devices that a vanilla Windows ISO would not normally have a driver for but for which the SAD driver store has a driver for?

Assuming triggering the SAD installer is all that is required for Windows to pick up the required drivers, then where in the Windows installation process is the best place to trigger this and what exactly do I have to trigger? Is there anything I can change in the registry in order for Windows to search the SAD driver store during on the HDD as part of the Windows installation process? If not, is there anything I can change for it to at least search this store once Windows has been installed? If so what?

Once the SAD driver store is on the HDD, can I then replace it with an updated SAD driver store anytime in the future? Assuming this is possible, do I then simply re-run the SAD "installer/updater" to have Windows pick up any updated drivers from the SAD driver store?

-Andreas