It means your hard-drive, not your XP cd.
If you can't get it to work, before shelling out the money for a new drive, try this:
Throw your CD in and boot from it. Delete all exsisting partitions, and create a 4 - 5GB partition. Now, create another partition. This second partition is what you will install XP on, so make it as big as you want.
So, basically, you should have:
C: - 4 - 5GB
D: - This is where you install XP
You can, of course, create more partitions if you like.
The reason for this, is, sometimes the drive can get bad sectors right where the first bit of data would be. If this is the case, things won't read/write properly and your OS, since it's the first thing on there, won't work. So, by bypassing that first bit of space, it may work.
P.S. You want the HDD to boot first in most cases, unless you want to boot from a CD directly.
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