The Problem could be that the xp install cd is just a update cd. This means that you should install another os like ME and do a update on ME with the Xp cd.
So basically install any other os in the windows range and do a upgrade from there.
My computer at home has the same problem. It refuses to install xp prof on my computer from the cd boot up fase but when I install another os and insert the xp cd while I am in ME it asks if I want to update and it installs fine
Hope this help
From a person who hasn't seen this forum in a long time