While you can install XP on that computer it will be slower than using Win ME. You cannot use a copied windows CD to install on a computer. It probably will not install anyway as copied XP cd's are usually missing some files. If you bought a win XP cd(OEM) the best way to install it is to use a win 98 boot floppy and fdisk and format the hard drive. A win XP cd should install from the cd then. You may have to go into the bios and set the computer to boot from the cd first. Hitting the delete key while booting the computer will usually get you into the bios. Most of the time i set computers to first boot from the floppy, then the cdrom drive, in the bios. That way you can leave the floppy disk out and the computer should look to the cd to boot after checking the floppy drive. I would change the boot order before fdisking and formatting the computer. It will take a while to format the drive after fdisking.
Unlike some other people i have had no real problems with Win ME. It crashed less than win 98SE and i could go for a week without rebooting. I have a intel 1 gig vectra puter that i installed XP on but went back to ME because the puter was faster with ME on it. Of course any newer programs made since about 2002 really need XP to run as they are programmed with XP in mind.
If you need a detailed explanation on fdisk and format i have a text file i will post. It is rather long and i don't have it on this computer right now, but i will post it if you want it.
Some websites say this to boot to the bios in compaq puters.
Compaq: Hit the F10 key (do this when the cursor is in the upper right corner of the screen blinking)