Dave_Smith,
There is no such thing as a "downgrade installation" from XP Pro to XP Home.
You have to back up and offload your data, then do a clean installation of XP Home.
If your optical drive is not able to read the XP CDROM you have, there are several things you can try:
1. Remove the nonperforming optical disc drive and replace it with a known good drive.
2. Using your favorite CD burning program, make a copy of the CD. The process of copying a CD uses an error correction system can can sometimes overcome scratches or other surface defects that would make the original CD unreadable for software installation purposes.
3. Are you sure you have your system's boot preference order set up correctly?
4. Try to use the six floppy diskette method of starting XP Setup on a computer without a bootable CDROM drive:
http://support.microsoft.com/kb/310994
For great advice on all topics XP, visit http://www.annoyances.org/exec/forum/winxp