Not formilar with Xp, but I have 2000 pro and when I experience such a problem I do the manual set up and it works..
Several questions:
1. How many CD drives do you have? If two, try the other one. Sometimes its a reading issue with certain drives.
2. When you say you tried to manually install, did you double click the "correct" set up application (usually the one that looks like a computer on the disc)..
3. If you have only one drive, try cleaning the drive itself with any of the commercial products out today..
Other than that, not much else to suggest. I am assuming that you have NEVER had this game on this computer. If you have, and took it off, there may be some old registry info left from the uninstall that is causing problems..
TomE