the cd rom sounds like it dont support bootable setup cds.
you can make floppys to do it instead. if you are stepping up to xp make sure the computer meets all of the xp requirements first or its going to be a waste of time trying.
first here is a registry repair utility from microsoft for windows 2000
if that isnt working for you hold down the f8 key before windows starts to load. this will show you a list of choices
I cant remember what they all are but Im sure there is one for checking the the disk for errors and other sorts of things.
if all else fails and you want to install windows xp make sure your computer meets the xp requirements first. then you can download the bootable setup floppys here