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When attempting to install XP, it claims that I am missing a file?
That could then be faulty media. Get another copy of the Windows CD. If it still happens note that sometimes *hardware* faults with the PC - like a faulty motherboard CAN cause that "missing a file" message.
Are you 100% sure that there are no hidden partitions still on the hard disk. Big name manufacturers sometimes setup a hidden hard disk if they are using recovery CDs [bestpricecomputers.ltd.uk]
If you have a recovery CD then you'll really have to use that rather than the Windows CD. Also, is it the same version of the operating system that the PC was originally shipped with?