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A parallel install is simply installing an additional OS to a drive which already contains an operating system. The OS's share the drive, not the files.
Unfortunately, XP will probably not want to share the C drive with another installation of XP.
If you want to try,
Boot from your XP CD.
Follow the installation procedure. Specify a directory (other than C:\WINDOWS) for the destination.
If the installation succeeds, you'll be be given a choice of which OS to boot when the system restarts.
You might consider removing the drive from the notebook, setting it as a slave, and connecting it to an XP desktop system. There are cheap adapter cables that will allow you to use the notebook drive
just as you would a standard IDE drive.
Another possibility would be to install XP to your external drive, if the notebook BIOS supports booting from that drive.
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