If you're installing WinXP onto a disk with data already on it (as in the case of your 1Tb drive), I'd suggest partitioning it and keeping the data on a separate partition. Then you can format the empty partition for WinXP.
Also: is the partition that you're installing WinXP onto formatted as a Primary partition (not Extended)? And has it been marked as 'Active'?
Also: Try using a different WinXP installation disk.
And: At what point in the WinXP installation does it restart, after which you get the Ctrl+Alt+Del message?
Thanks for the assistance Morgue, I chucked it into my big PC and did a format there, then did a fresh windows install after a format in the windows setup, now all working 100%! All I now need to do is get my TV card remote working :S