Start up the pc w/ the disc in the drive (ensure the bios setting lets you boot from the cd rom first before hard drive). It will then go to a blue screen and let you press F6 if you need to install a 3rd party raid driver as it loads the setup files.
After loading the files, you agree (F8) to their licensing and then select to install XP (sorry forgot the button on that one).
Instead of just reinstalling it on "C", make sure you delete "C" then recreate it. Then select the new "C" to install XP on. If you just select "C" without removing and then recreating it, you will have two copies of XP on your C Drive. It's like dual booting the same OS...
As you can see, there's not much to it.