|Two things you need to do before that can be answered.|
First, make sure that your BIOS will allow booting from external (USB?) device.
Second, make sure that there are XP drivers available for your hardware.
If you can answer Yes to both, you can then install. Just set the boot order to CD drive first in order, set allow to boot to USB, download all drivers needed to a floppy (if available, easiest with XP), Insert XP disk in drive, restart and select Custom from the menu so you can select the drive and format it.