|XP isn't gonna run well with just 384MB RAM.|
If you have the XP upgrade CD, you will also need a Windows CD that qualifies for the upgrade. As thomasad said, you will need a copy of Windows 98/ME/2K. What you'll need to do is start the XP installation using the upgrade CD & at some point along the way, it will ask for proof of ownership of a previous Windows version. At that point, eject the XP CD & insert the qualifying CD - XP setup will then verify that you qualify for the upgrade. Once you get the OK, just eject that CD, replace it with the XP CD & the installation will continue.