Hi blueroan. Sounds like the BIOS is still trying to boot from the hard drive first. Does the optical drive access light turn on before the hard drive access light does ? It should. If not, go recheck the device boot order in the BIOS. Remember to Save and Exit from the BIOS.
Perhps you have a faulty optical drive. This would cause the drive to ignore the installer CDs or cause the BIOS to think that there was no optical drive at all. The chances that 2 completely different CDs having the same error is remote. The hardware may be faulty but it is more likely that the lens is simply dirty.
Open the tray. You will see the lens in the middle of the tray. Get a clean tissue and some rubbing alcohol. Dampen (NOT wet) the tissue and gently wipe the lens in circular motions. Try booting from either disc again.
You should be sure that the laptop is up to the job of running XP. It should be 800 MHz or faster, have 256MB of RAM and have at least a 10GB hard drive. XP can run on less than this, but it will be excruciatingly slow.
Memtest86+ can tell you the processor speed and the amount of RAM (and test the RAM).http://www.memtest.org/
The Hitachi Drive Fitnes Test can tell you the hard drive size (and test the drive).http://www.hitachigst.com/hdd/support/download.htm
Both these diagnostic utilities are available in ISO file format that can be burned to CDs using suaitable software such as Nero or Active ISO Burner (free).http://www.ntfs.com/iso-burning.htm
Make sure the PC's BIOS is setup to try to boot from the optical drive before it tries the hard drive. If these CDs don't load and run then the optical drive needs to be replaced. Often drives can be found on eBay rather cheaply if the laptop is not too old.