You do realize that reading the XP CD itself, such as for a repair or a
clean install, should NOT require XP to be installed, let alone fully
functional.
The XP CD is bootable, and that means it can be read using the PC's BIOS, at
least far enough to transfer control to the CD. Consider, if you had a
blank hard drive, that CD should be able to boot the PC and install XP. A
repair is just a different type of install.
If your PC can not do that, then problem is NOT the XP installation on the
hard drive.
Look into BIOS settings, and be sure that booting from CD is before booting
from hard drive.
If the BIOS is set to boot from CD first, but does not boot with a real XP
CD inserted, then the CD drive itself is probably defective. Replace it.
But, let's be clear about the jargon, an XP CD is not the same as
restoration CD, often provided by PC makers. The XP CD comes in a green or
blue paper box with Microsoft logos all over. Inside the box is a paper
folder containing a CD that has a holographic top, and says Microsoft
windows XP. On the back of the folder is the product key. If you are using
an OEM CD, it might have less fluff, but it will still say Microsoft windows
XP. If the CD says anything other than Microsoft (e.g., Dell, Gateway),
then contact their support group for help.