I had the same problem about 2 hours ago. Same error as you. I was loading XP professional from a backup. Ticking me off big time.
So, what I did just for
profanity deleted and grins was load XP Home edition from the ORIGINAL CD, and it loaded flawlessly. Then stuck my XP Professional backup in, and upgraded. It worked.
What's the morale of the story? Heck, I don't know. 1) Are you installing XP professional or home? 2) Is it an original or a backup?
Grandma
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