It should say starting windows98, then you want to boot with CD ROM support, if you are planning on directly installing XP. And that is if for some reason your XP CD isn't bootable and/or you just don't want XP to format the drive for you when you begin the installation.
If you insist on doing it the hard way then type Format c:
press y
enter volume name after the format is complete
Then here's the often overlooked important part, you are going to need smartdrv.exe, and I don't know where that is on the XP Install CD, so I always get mine from a windows 98 disk.
But you must run smartdrv.exe before you can start the XP installation, otherwise you will be waiting a LONG time for the install to finish.
Then to start the XP install its
CD Drive:\i386\winnt.exe
now I *think* that is all right, but its been a long time since I've done it that way. Its just simpliest to have the XP install format your drive.