From XP Inside Out
"Most computers that meet the minimum requirements for Windows XP include the capability to boot from a CD-ROM drive. In some relatively uncommon configurations, however, this option isn?t available. This problem is most likely to affect you if your CD-ROM is connected to a SCSI adapter that doesn?t allow booting from a CD, or if you?re trying to install Windows XP on a notebook computer that doesn?t include an integrated CD drive. Try one of these alternatives to work around the problem:
Start your computer from a Windows 98/Me emergency boot disk. This floppy disk includes generic CD drivers that allow you to access most IDE and SCSI drives. From the MS-DOS prompt, run the SmartDrive disk-caching utility (Smartdrv.exe), and then start Windows Setup using the Winnt.exe command. (Because this program is running from MS-DOS, you can?t use the 32-bit Setup program, Winnt32.exe.)
tip - Don?t skip SmartDrive
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If you have to copy files from a CD to your hard disk using MS-DOS, the SmartDrive utility is essential. Without this helper, copying the Setup files can take hours; with SmartDrive installed, the process practically flies by. Look for the Smartdrv.exe file on the MS-DOS startup disk. If it?s not there, you can copy it to your boot floppy from the \Windows\Command folder of any version of Windows 95/98/Me.
If you can access the Windows XP CD from your previous Windows version and you have a FAT32 partition that is separate from the one on which you plan to install Windows XP, copy the i386 folder from the CD to that partition. (If you have only a single partition available, you?ll be unable to perform a clean install using this technique, because you won?t be able to wipe out the current system partition without also erasing your Setup files. Likewise, if the second partition is formatted using NTFS, you will not be able to access it from a Windows 98/Me boot floppy). Then restart the computer using the Windows 98/Me emergency boot disk and run Setup from a command prompt, again using the Winnt command.
note
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Where does Setup install Windows XP system files? The exact name of the folder varies. On a clean install, Setup creates a top-level folder called Windows on the drive you designate and then copies system files there. On an upgrade, Setup uses the current path for %WinDir%?for Windows 98 or Windows Me, that?s typically C:\Windows; for Windows NT 4 and Windows 2000, the drive letter may vary, but the name of the system folder is usually \Winnt. When performing a clean install, you can specify a different folder name, but your safest choice is to use the default name.
Whether you started from a previous Windows version or booted from a CD, your next stop (after Setup restarts, of course) will be a series of text-mode Setup screens. If your system currently contains a working version of Windows, you?ll see a screen that offers to repair the installation for you. Press Esc to bypass this screen and reach a disk setup screen similar to the one shown in Figure 2-2.
From this screen, you can do any of the following tasks:
Select an existing partition on which to install Windows XP Use this option if you already created and formatted an empty partition in preparation for setting up Windows, or if you plan to install Windows XP on a preexisting partition that currently contains data or programs but no operating system. Do not choose this option if a previous version of Windows is already installed on the selected partition. The result in that case might be to leave behind unwanted system files and leftovers from previously installed programs, defeating the purpose of doing a clean install."
Hope it helps.