So, I formatted the drive on another system (running XP Pro sp3) with an Apricorn USB Hard Disk adapter, using Disk Manager. I partitioned the entire surface, formatted NTFS, but did not assign a drive letter, because E: was the first available and I knew I wanted it to be C: in the netbook. Tried XP Home installation again, and it stopped at the same place with the same error.
So, I put the disk back on the Apricorn and made the partition "Active" (forgot to do that before) and tried again. This time, it blue-screened with a 07B error. Oh, joy.
Two chat sessions with Gateway yielded some interesting links for drivers and a useless format utility (intended for downgrading a Vista installation to XP). They were pretty nice. This box is really an Acer netbook, but that's another story.
So, what do I do? The bios (F2 setup) sees and id's the drive, but the XP Home disk does not. I have not looked at the drive in Linux. It is VERY difficult to get this netbook to boot from the CD. It continually tries to boot from the Ethernet adapter, probably because that is how they load the image at the factory. It prompts to "press any key to boot from CD", but that does not work. Quickly pressing <alt> and F10 seems to work to boot from the CD, but it hangs at the same screen (and BSOD, now).
Thanks for your suggestions.
Edited by jtru1, 11 August 2011 - 09:36 PM.