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With some Windows 7 installations, the boot manager is written to a separate & hidden 100MB partition which is active.
If this hasn't been re-formatted or erased it will continue to "drive" the boot process.
Since there can only be one active partition on the system, you need first to delete that one so that Windows XP Setup can make the new "target" partition active instead.
You'll need to use a utility which can wipe the entire drive, including hidden partitions, in a single process.
DBAN can do this. It runs from a bootable CD or floppy-disk: http://www.dban.org/help
If you continue to get bad sector errors at your next attempt at XP installation, the drive may be starting to fail so need to test it to confirm. Ascertain what make the drive is, then download the appropriate diagnostic software in the form of an ISO CD-image from the appropriate link in the list at the top of this page: http://www.tacktech....ay.cfm?ttid=287
Edited by phillipcorcoran, 17 May 2011 - 10:34 AM.