I don't know about editing a file to accept the CD, but it might be that the CD has a slight mark on its surface, causing it to me miss-read.
I have one of these to keep my important discs in good condition ...
Or, it would appear to be getting to the stage of needing a complete re-install of your XP. First, you will need to back-up all your important stuff, preferable to another drive - then do a Full Install of your XP.
Other than the above, I don't know what else to suggest - except, going to the expense of another set of XP discs.