did you fiddle much more with bios besides that? when you are trying to re-install, make sure things are disabled you don't need
have you tried to resinstall before and have it successful? Or all attempts at reinstall are not successful thus far?
do you have access to another working pc? If so, put virtal pc on it and test your install discs.
hold your original install disc up to the light, do you see any pinholes coming through it?
The BIOS has very limited settings,its set up OK,
HDD is set to auto.
I used the same XP disk on a Compaq 700 a few days ago with no issues.
I was getting similar errors on the original hard Drive,when that drive was tested in BIOS it returned ;Fail , thats why I replaced it.
This new one passed in the bios test.