so... did the computer have windows XP on it before?
or did you buy a new xp cd and want to put it on an old computer...
someone mentioned memory - I have worked on old computers before and on one of them I couldn't install windows xp untill I added more memory because I kept getting the BSOD(blue screen of death)
another thing you could check is if the cables from the motherboard to the hard drive and cd drive have not come loose...(although I doubt it, one or more of these cables may have gone bad)
also, although you said the xp cd is new, make sure there aren't any scratches...
if the cd is ok, it might be down to ram, cd drive, or hard drive...
could you post the specs of your computer...
processor type/speed, MB of ram, HD compacity, etc...