Windows XP won't install on Parallels

I've successfully installed Parallels on my MacBook (2.2GHz) and subsequently wanted to install my copy of Windows XP. When the Virtual Machine loads it says it can't boot from the hard drive, floppy or CD/DVD Drive even though the Windows XP disc is inserted on the Mac and I can see it on the desktop. It labels the error as "512." Does anyone know how to fix this?
Thanks.

Make sure you have the most recent version of Parallels. Also, I think may need to tell Parallels to "capture" the disk. I prefer to use Disk Utility to make an image of the installer disk and then tell Parallels to boot from that image. The install will go much, much faster.

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