Having the floppy drive set as the first boot device will not matter if the floppy drive is empty...it will check the floppy then check the next device (presumably your cd-rom) then the next ( Hard Drive) etc etc down the line... check BIOS settings to determine which is first, second etc
i dont have a legal copy of XP (which is why im not running it anywhere) but Win 2K would allow me to boot from the CD, then, with some finagling of options, delete any/all partitions and create/format a new partition, then install on new partition of choice...unknown if Win XP has this, but i cant believe Mickeysoft would sell an OS that was unable to be installed on a blank HD unless it was an upgrade (like the win 98 "Update" SE cd, although it occurs to me there was a trick to doing that without the "upgradeable system" (i.e.: win 3.1, 95, 98 )...
kinda got to rambling but hope this helps...