Actually KingX13 does have a valid point. You can drop the XP files onto the drive and install. But the way it has to be done will force you to lose everything. Basically the only way that method will work is if you format the drive, then copy the entire contents of the XP install media to the drive and then restart. This includes the autorun stuff that is hidden so that the XP install will run just like you were booting from the CD itself.
But with no Drive at all and no way to format the entire drive, then copy the files over. There is no way you can use this method. So while it can be done, it cant be done with the available resources. You will have to do what Paton said and either get the USB aspect working, which i doubt will, or get a new drive.
Now the reason i say that i doubt it will is cause if you have Win2000 on the machine now that means that the machine was built before they were able to be used to boot from USB. So your not going to have the resources available to do that method either. So you will have to get a new drive.