Step #1: Plan your installation
When you run the Windows XP Professional Setup program, you must provide information about how to install and configure the operating system. Thorough planning can make your installation of Windows XP Professional more efficient by helping you to avoid potential problems during installation. An understanding of the configuration options will also help to ensure that you have properly configured your system.
I won't go into that part right now but here are some of the most important things you should take into consideration when planning for your XP installation:
Check System Requirements
Check Hardware and Software Compatibility
Determine Disk Partitioning Options
Choose the Appropriate File System: FAT, FAT32, NTFS
Decide on a Workgroup or Domain Installation
Complete a Pre-Installation Checklist
After you made sure you can go on, start the installation process.
Step #2: Beginning the installation process
You can install Windows XP in several methods - all are valid and good, it all depends upon your needs and your limitations.