hello all.
first of all, i got my u305 s7467 to function on XP without a real problem. even audio is good (skip down for that).
I have to say many thanks to Everyone here and in other places on the net...
took me two nights and 1 day, but i am working with a fully functional XP on the u305. i even called toshiba a couple of times (they tried to help, but not really knowledgeable). the function dropdown candy isn't working. i dont really need that, do i?
i'll summarize the steps to help people move along.
1. slipstream the SATA drive with XP using nlite (been covered already)
2. but after install, will notice tons of errors without correct drivers.
3. go to toshiba website. look for your model laptop in download section. use "Refine by [OS]" [Windows XP]
4. install all except maybe disc creator... i didn't see a need. (i might be assuming too much that all u305 laptops use similar drivers and utilities...)
* at this point some things like your LAN, Wireless LAN, Bluetooth, and fingerprint thing should be operating. at least now you can download the other files directly instead of using a second computer

* and your screen should be the ugly still...
5. go to the intel website and look for the mobile 965 express chipset and download the "Intel® Graphics Media Accelerator Driver for Windows* XP" to fix that. This will give you the video drivers.
6. insert the Toshiba recovery disc 1 for some drivers we can use on the XP.
7. you can either explore the DVD to the COMPS1 folder or use the "install applications and drivers" option. and install:
Camera Utility, for the camera assistant. (the camera works without the assistant because its a USB plug and play-i hope)
Ricoh Card Reader Controller, to read other flash memory other than SD
Toshiba Software Modem, to enable the RJ11 jack (the phone line...)
*i believe thats almost it. By now, everything should be as it is.. expect the sound isn't working. yes, I looked everywhere for something to make it work. I noticed at this point i had one "PCI-Device" under "system devices" in "Device Manager" acting up with a driver-not-installed kind of error. i assumed this was the problem, only thing that was holding me back.
You have to manually pick the driver to make it work. I think it was suppose to pick up an Intel HD Audio Driver but it wasn't, so...
update driver > yes, this time only > install from a list or specific location > don't search. i will choose the driver to install > sound, video and game controllers > MS UAA Bus Driver for High Definition Audio
that should cover your sound issues (and maybe even modem).
if it didn't work.. then update your windows XP. there's a hotfix that addresses the HD issue. i think its called KB888111.
good luck all!
downgrading fun!