This sounds like a hardware failure or a scratch in your CD. Do you have another machine that's not being used? You might try installing XP on that one and moving the hard drive over! But first, if your CD is really scratched up, buy a cd de-scratch kit. That might fix your problem 
Also, if you want to dual boot on the same HD, install-on-seprate-computer idea won't work. If the CD is scratched, and you can buy a cleaner kit that fixes it, see this guide for how to dual-boot linux and xp