I would use robocopy to do this. It's in Win 2003 resource kit tools. I think you can run this on XP as well. It can retain attributes, permissions, etc. You might want to use options /e, /zb, and /copyall.
Download here:
http://download.microsoft.com/download/8/e/c/8ec3a7d8-05b4-440a-a71e-ca3ee25fe057/rktools.exe