|I'd be inclined initially to safeguard data etc. - and then set about fixing the problem...|
Knoppix/Ubuntu etc. will likely allow you to boot and extract/copy data to optical media. Verify those copies can read on at least one other system if possible?
If you had a legit copy of Vista - and know the details (the magic key/COA etc...) then likely M$ may allow you a replacement copy (for a few £££/$$$); or the vendor may oblige too? If it was recovery disk... then vendor may oblige again with a replacement? And likewise it's very likely there are others "out there" who can/will sell you a set of recovery disks...?
Is your XP CD a full version; or a dreaded recovery set?
RAM may be an issue here... If you have two or more sticks installed - reduce to a single stick (min 128Meg) and try each in turn?
I haven't gotten really involved with Vista - yet; have no desire too - unless essential... But there are issues in replacing it with XP to be aware of?
This ref refers to the basic issue
Be absoulutely sure you have all necessary drivers for XP that apply to your Acer; visit Acer site to see what is there - before you try to remove Vista and install XP...
Rather than use F12 to boot from CD... change boot-sequence in bios to be CD first then HD... Likely this will circumvent the problem you descrie intially?
Presuming so... and you do have all drivers etc required... (and don't proceed/attemtp to install XP until you have) the boot with the CD and reformat the drive... etc?
And again copy off all data first (using Knoppix/Ubuntu CD to this end).