|Here is a link to a guide for installing Windows on a Laptop with no CD Drive.|
Your laptop does not have enough Installed ram for Windows XP. You can upgrade to a max of 320mb by installing 1 256mb PC100 Dimm. The 64mb is not removeable and there is only 1 upgrade DIMM slot, Enough for XP but still slow. Win2000Pro would be a better choice for this LT.
BTW the OS on the HDD is of little use, you'll never get it activated on the Toshiba. So you'll need to purchase an OS unless you have access to the Original that came with the Laptop. Win98SE is most likely the original OS.
The guide and the discussion following it have some good suggestions and sources for what you need to do this install.
You will still need to go to Toshiba to get some Drivers and Utilities. This Laptop is no longer supported directly by Toshiba so be sure to make good backup copies of whatever you can get.
There is nothing to learn from someone who already agrees with you.