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PARTITIONING

1. Insert the Windows XP CD-ROM into your CD-ROM drive.
2. At the Welcome to Setup page, press ENTER to continue.
3. Press F8 to accept the Windows XP Licensing Agreement.
4. If an existing Windows XP installation is detected, you will be prompted to repair it. At this point hit the ESC key (do not repair).
5. The screen will now list all existing partitions and un-partitioned space for each hard disk. Use the cursor/arrow keys to choose where to create the new partition. Press D to delete an existing partition or press C to create a new partition in un-partitioned space. If you press D to delete an existing partition, you must then press L (or press ENTER, and then press L if it is the System partition) to confirm that you want to delete that partition. Repeat this process for each of the existing partitions that you want to move (or remove) in order to create your new partition. When all necessary partitions are deleted, you can then select the remaining un-partitioned space and then press C to create new partitions.
Note: If you want to create a partition where at least one partition already exists, you must first delete the existing partition or partitions and then create the new partition. Type the size in megabytes (MB) that you want the new partition to be. Then press ENTER. Alternatively, you can just press ENTER to create the partition using all the available space (i.e. create the biggest possible partition).
If you want to install Windows XP, use the arrow keys to select the partition where you want to install Windows XP and then press ENTER.
Note: If you do not want to format the partition and install Windows XP, press F3 twice to quit Setup, and ignore the following section. If you do this, you must find another way to format the partition.
FORMATTING THE DRIVE

To format the partition, use the arrow keys to select the partition where you want to install Windows XP.
* Select the NTFS formatting option and press ENTER
* Choose Quick Format or Full Format:

Differences Between a Quick Format and Format During Windows XP Setup
http://support.microsoft.com/?kbid=302686

* Continue installing Windows. Installation part is covered in detail by the site below (especially 1st two links). Must visit.
michaelstevenstech.com/cleanxpinstall.html

theeldergeek.com/xp_home_install_-_graphic.htm
microsoft.com/WindowsXP/expertzone/columns