Hello Sucio,
You wrote, "The CD I'm using is one that was purchased..."
It sounds like you are trying to use a CD for a retail copy of Windows XP to do a repair reinstallation on a preinstalled/OEM copy of XP. As you have discovered, this is not possible. You have to match the type of license of the installed XP to the corresponding type of installation CD. To do what you want to do, you need a genuine Microsoft hologrammed Windows CD from the systembuilder/OEM/small manufacturer sales channel. These will have "For distribution with a new PC only" in the hologram in the upper left quadrant of the CD.
For more specific help, please post your query in the Windows XP "Install, Activate and Upgrade" section of
http://answers.microsoft.com .
Also, I would recoomend that you visit the support pages for your make and model of laptop at the laptop manufacturer's website for specific instructions on how to execute the manufacturer's recovery/reinstallation procedures.
