System manufacturer and model?
FWIW: You cannot run an XP install CD from safe mode...what would be the point, since you cannot reinstall XP on itself, as long as XP is open? In order for any install of XP to be repaired by a reinstall...it must be totally closed, which is why installing files from an optical drive works only when XP has not been entered.
That said...recovery disks may be different. Recovery disks are issued by the manufacturer of systems (e.g., Dell, HP, eMachines, etc.) and are not the equivalent of a Microsoft XP CD...even though the uses (in part) may coincide and some of the files on the CD are files used to install XP.
Soooo...to give you the right advice, we need to know which you are calling "XP installation disk."
Whenever there is an error message that provides clues on situations where the system is stifled...it's good to write those down. There are a zillion possible errors for XP and there is no generic cure (other than a clean install) for whatever might be wrong.