Use only "necessary devices"
From what I've personally experienced installing XP, it will usually go into a "hanging" state during "Installing devices" when it's trying to find a driver for something that it doesn't recognize.
What I've noticed (and have gotten it to work on several occasions) is to remove all expansion slot cards except the ones needed (i.e. a VGA card) If your system board has an on board video port (and it still works), then remove all PCI expansion cards until AFTER XP finishes installing. You can always power down and re-install hardware when you have the OS fully installed, and download/upload drivers from either the manufacturer's website, or the installation media that came with the device.
I had this happen with a Dell Restore disk and couldn't figure out what the problem was, until I removed a Modem PCI card and got XP to finish the install (just an example- not always the case).
Hope this helps everyone!