Its not very specific it has to do with either hardware or a faulty driver, considering he cant install windows i think we can rule out a driver. I dont think its the mbr i think it might just be an efi issue

Hardly. A lot of drivers have to be loaded before the Windows installer can get started. He doesn't have an EFI computer.

probably a good idea, but then you need to switch the hard drive BIOS setting back to legacy. The default is likely to be "native", and native is unlikely to work during an install of XP.

Is this a sata machine & is it requesting the sata drivers?
Windows xp doesn't have sata drivers they have to be manually loaded during install.

I doubt the default is native, if the computer has IDE ports. Either way, that wouldn't cause his problem.

If that is the case, they why does the OP report this:

If Windows is successfully formatting its partition, then this means it is seeing the disk, seeing the partition table, and going about its merry way and formatting things. So what hardware error are we supposedly dealing with here? The drive seems fine by all reports. There could be some BIOS setting that is screwing things up I suppose, so the first step I'd try is resetting BIOS to its defaults. Then try the installation again and see what is reported.

It shouldn't be necessary, but it wouldn't hurt, to zero out all of track 0 after booting with a Linux Live CD, before attempting any Windows installation (as the first OS installed on a disk). MAKE SURE /dev/sda is the correct drive designation before executing the following: "dd if=/dev/zero of=/dev/sda bs=512 count=63" Let me repeat that warning: "Make sure the of= specification is correct before hitting your enter key!"

Hello,
Thanks for your replies.
I tried resetting the BIOS several times, I tried changing the harddisk settings to NATIVE also but that did not help.

I used gparted tool to wipe off all the partitions and create a new MS-DOS file system onto which I created one partition for Window 20GB formatted and another extended partition in which I have an ext4 partition.

But all this did not help. Window XP installation fails at the same point while copying devices to the system with the same error.
Reading all your suggestions I think I will need to try the following.

1) TRY with another windows XP installing disc. I have YET to get another one.

2) Use the live CD to trash the MBR after getting to a prompt

3) use virtual box (But here too the Windows XP may fail I think not sure) but I need to try.

I have been busy with some other issues and will try the above and get back to all of you with my findings.

Thanks very much for your suggestions. They have given me a better perspective and I hope to have XP installed soon.

If it always fails while copying at the same point, this could be a bad CD, unlikely but not impossible. It could also be a memory issue, hitting the same area in buffer each time. Have you done a memcheck? If you install in Virtualbox, the virtual hardware is totally different, so if it does exactly the same thing, it would have to be an issue with your CD. Have you tried copying the CD?

Usually winsxp has a dialog box for the failed object if it's already installing & has given the estimated time of completion. I would say that it's not hardware related but a scratched disk.