Well, your first fault was buying an internal floppy for your laptop. You should have got a USB (or if your laptop won't boot with USB, a COM floppy) then you could have both drives on at the same time.
Second, you said your CD-ROM was hotswap. So boot, and when it asks for the XP CD, pull the floppy out and slop the CD-ROM in.
BTW, have you tried just booting up to W2K, sticking in the XP CD, and running the installer?