Not sure if you can do all this but might as well post it anyway.
Couple things to try.
1. If you can access the cd from another computer you can try to reburn the cd and see if that works. Sometimes burning the cd to another cd works.
2. You going to have to find some way to get all the cd contents onto the harddisk drive. On one of my laptops at work, I have no CD drive, and no floppy. How do you reformat such a laptop?
You can buy a $20 IDE laptop connector from compusa, this is used to connect a laptop harddisk to a desktop computer. You put all of the windows xp contents in a folder on the laptop drive after you reformat it.
On the root (the main space not in a folder, I guess what you call C

put the contents of a windows ME or Windows 98 SE boot disk. make sure to include Smartdrv.exe.
When you reinstall the harddisk into your laptop it should boot into dos. Make sure to start up smartdrv.exe then navigate to the folder with the xp CD files. Look for the folder I386 and in it should have a file called winnt.exe
start winnt.exe from dos, this is the 16 bit windows xp installer. You may or may not need to restart this process couple times before it goes all the way, when it does you'll have a normal windows xp installation.
Hope that was kinda clear lol. If not just look online how to install windows xp from DOS.
And don't believe the non-belivers that tell you, you can't install xp from DOS because there are many of them. :biggrin: