Are you mixing up System Restore with a "Reinstall of XP"?
That restore disk you have is most probably HP's way of restoring your computer to its original condition, ie the way you received it. This will delete all of your own files/programs/music/videos, etc.
A System Restore is XP's own utility to go back to a previous date. System Restore can be found in Start > All Programs > Accessories > System Tools > System Restore.
Have you removed the diisk from the CD drive? If so, can you boot up into Safe Mode? (On boot up press F8 once a second after the BIOS screen disappears). What happens when you try this?
i am doing a system restore on my hp 521c. i followed the directions that came with the restore disc but it just keeps going back to the hp pc system recovery screen and wanting me to do a non-destructive system recovery but i have done that twice now and it keeps coming back to it. how do i make it stop and go windows xp.