if you havent already you mite need to go in your bios and select an option that says " boot from other devices" or something similar to that. i dont know if your computer has a boot menu but on some systems like Dells if you press F12 it gives you a boot menu to boot from a USB Drive.
if you can do either one of those, you wouldnt need dos to install your OS if thats what your trying to do.
you said thats as far as you get, did you type setup.exe in prompt to start the set up ?
also if you are trying to install windows XP i believe, like 99% sure that you cant install xp from dos.