system hangs before start up of installation of win xp

Hi,
I initially had win xp installed, thereafter i installed win 7 on other partition.
Recently i formatted the partition which contained system files of win 7 from win xp.
Now, definately it seems i have deleted the MBR as well, thus win 7 is not starting but also win xp re-starts after loading of the startup logo.
When i am trying to install new OS from CD ROM..the setup is detecting CD and proceed till the first screen stating "Setup is checking ur configuration.." and then after it hangs before the appearance of the blue screen which begins copying windows files.

Can u please advice on this as in what could be the problem, is the HARD DISK is damaged or something else ???

Thank You