Vista - XP Installation Failure (loop)

I have successfully been using Virtual PC 2007on my Vista host machine.
I deleted the "My Virtual Machines" folder by mistake (please don't ask) and
began reinstalling the OS I had previously. Win 98, openSUSE 11.1, Fedora 10
and even Windows 7 all installed and run fine. However, XP Professional will
not install.
Here is the sequence that loops (this happens with either a physical CD or
..iso):
(black screen) "Setup is inspecting your computer's hardware
configuration... "
(blue screen) "Windows Setup"
"Press F6... "
"Press F2... "
"Setup is loading files... "
"Setup is starting Windows... "
"Welcome to Setup"
The first bulleted option is "To setup Windows XP now, press ENTER"
The license agreement appears.
I scroll to the bottom and Press "F8=I AGREE"
I press ENTER
"Windows XP has not been installed on this computer" appears, the system
restarts and the entire process repeats; ad infinitum.
Any suggestions on how to complete the installation are appreciated.