The latest version of Window Media Player that will run on XP is 11.
It has the option to rip music CDs to other formats which you can then play from your USB drive.
Choose the 'Rip' option from the main screen.
Windows Media Player will rip music CDs to WMA (Windows Media Audio) by default. Since you didn't mention what model car stereo or what media formats it supports I recommend selecting MP3 -
Everything plays MP3. If you require other formats then you will have to use a different CD ripper such as the one priscus suggests.
One more thing - Media Player will usually identify the CD inserted and populate all the fields with the correct Album, Artist and track titles - in some cases it won't and will leave those fields with generic info.
If this happens it is recommended you right-click on the fields for Album, artist and track titles and manually enter them before ripping. If not then when playing in your car stereo you will see "Unknown Artist - Track 1, Unknown Artist - Track 2." This will make choosing the correct songs to play impossible while driving especially if you have a large amount of music files on your USB flash drive.
When you're ready just hit the 'Start Rip' button on the lower right of Media Player.