If you have a local area network (LAN) set up and you want to install Windows XP on a computer on that network without having to use the installation CD, you can perform a network installation. This type of installation allows you to install or upgrade the computer on your network with Windows XP without the CD, since the installation files are transferred through the network instead of from the installation CD.
Insert your XP installation CD into the computer that will act as the file server. Open Windows Explorer (right-click the "Start" button and select "Explore") and copy the "i386" folder from the root of the installation CD to a place on your computer, such as to the root of the C drive.
Right-click on the folder you copied and select "Sharing and Security...." Click "Share this folder" and then click "Permissions." Select "Everyone" and check "Full Control." Click the "OK" button two times.
Go to the computer where you want to install Windows XP. Open a command prompt (click "Start," "Run," type "cmd" and press "OK"). Type in "net use Z: \server_computer_name\i386" and press the "Enter" key. Note that "server_computer_name" is the local network name of the computer that is sharing the i386 folder across the network.
Type "Z:\i386\winnt /s:Z \i386" into the command prompt and press the "Enter" key. This will begin the file transfer and set-up process by copying the files from the server computer to the local computer where you are installing XP.
Wait until you see the Windows XP set-up screen appear. Press the "Enter" key, then press "F8." Choose which partition you want to install Windows to, press the "Enter" key again and then press the "Enter" key one final time to begin the set-up process. This process will be automated. Once it finishes, you can start using XP on the computer.