The drive may have difficulty reading the XP cd and your see complaints like yours. Try a CD Lens cleaner, a fresh copy of the OS CD and finally exchange the CD drive.
I have a custom computer that I had working from about 2002 through last year. About one or two years ago I decided to upgrade to Media Center Edition 2005 with a Hauppauge WinTV-PVR-150MCE card as my tuner card. Two weeks ago i decided to start over because there were a lot of problems with the system. I re-installed it today, but it only had the Desktop, Control Panel, and clasic menus. On the features list I had checked off Media Player, Outlook Express, and Media Enhancments, and the accesories folder. But all that was there was the System Tools Folder. I then decided to re-install agian, but the setup screen that appears when I boot from the CDROM says that FTDISK.SYS is corrupted and then it tells me that setup cannot start. I ran a comatibility check yesterday and it said that my system had no incompatibitilies and it could sucessfully install and run the operating system. What should I do?