The Ronbo,
You should have followed the steps in this MS KB http://support.microsoft.com/kb/918884/en-us, specifically the section "Perform a clean installation of Vista, Method 1."
Vista differs from previous Windows in that Setup cannot do an upgrade installation when the computer is started from the Vista DVD. Previous Windows would allow you to start the computer from the CD, then begin an upgrade installation, and then prove your eligibility for the upgrade by inserting the qualifying media. Vista does not do the qualifying media; you prove to Vista you have a qualifying previous OS by starting Vista setup from within that OS.
So to get back on track, do a clean installation of your previous XP, then insert the Vista DVD and follow the instructions linked above.
If you decide to return Vista, please read the return policy info at this link: http://www.microsoft.com/mscorp/productrefund/refund.asp