Try this site should help you solve your problem or work around it.
http://wiki.eeeuser.com/windowsxpusbor you can do it this way
Installing Windows XP from a USB keyHere’s how to create a Windows XP, bootable, USB key. This is very useful especially persons using Netbook or in the case that your PC is not equipped with a DVD/CD player.
Creating your bootable USB key:First of all, you will need: * A USB key (capacity:1 or 2 GB;)
* A Windows XP CD ( official version )
* A PC with a CD player and a USB key
* And this software
WinSetupFromUSB :
http://www.datafilehost.com/download-109e97af.htmlIt will also require that: * Your USB key is bootable;
* Your machine accepts the boot on your USB key (see in the BIOS);
* Your key is fast enough to avoid delays during installation of the OS;
Installing XPOnce downloaded, run the installation software and follow the installation wizard. At the end of the installation, the software will launch.
*
Step 1: Insert your Windows XP CD into the CD ROM drive and click Browse
*
Step 2: Enter the destination path on the PC
*
Step 3: Select your CD ROM drive where your CD is Windows XP and click OK
*
Step 4: Click Refresh and then go on the small arrow just to the left and select the USB key that you used to boot XP
*
Step 5: Select Fixed
*
Step 6: That everything is ready you can just click on the GO
* Wait for the copying procedure. Then close the software (you are informed when the copy is complete)
* Installing Windows XP
* In a first time you connect the USB to your netBook and go into the BIOS
* Then set your BIOS to boot your PC on USB key;
* Once done, save and restart your PC;
* Here, you'll have two lines in the GRUB menu;
* The first is to select the startup of the installation procedure
* The second line will be for the rest of the installation and the first boot of Windows XP;
* Therefore boot on the USB key until Windows XP is fully installed.
* Follow the installation instructions as for a normal installation
* Now your Windows XP is installed with your USB key!
