I don't use XP Home so I'm not 100% sure but I thought the only way to get to the administrator account in XP Home is via a safe mode boot, which shows the Administrator account and other user accounts.
If it is available via Control Panel, User Accounts, perhaps they can do it that way and install as the administrator. However, in XP Pro, following the method you suggest, I don't see the Administrator account only all user accounts, Me and Guest account no Administrator.
Could the switch accounts, Start, Log Off, Switch User (requires fast user switching I believe, which I have disabled) so I not sure if that will enable them to log on as the administrator.