It does require WDS to use multicast, but PXE booting is not required. There is a conversation here that discusses this, and the user in this case was told to add a boot image (in WDS) browse to the deployment share and select the image you are going to deploy. Use this newly created boot image on your USB key or CD to boot the machines that you are going to image. This boot image will make the request to the WDS server and get added to the stream.
The requirement for WDS is in the document that wmmayms linked on page 445.
Hope this helps,
David
Windows Outreach Team - IT Pro
www.microsoft.com/springboard