Hmmmm
Is this a reinstall? If so you might try running the uninstall program.
I would try mmonnin's idea first.
Have you checked other discs in the drive?
Have you checked the OfficeXP disc in another computer?
You could try changing your cdrom drive letter, or even blow out your IDE Controller drivers to force Windows to re-find and re-install your drive. (A little kick in its digital arse).
Assuming the disc & drive are OK, this is a weird one.
Good Luck!
Prof