The disquette has nothing to do with booting windows.. but it may be indication the boot sequence setting is wrong in the BIOS, fix this setting to boot from the CD/DVD drive, and next try a Repair-install of Windows XP or a format and new installation. One more clarification is you need a XP CD not a DVD (unless you have a copy of Windows XP on DVD) to install a fresh boot sector* on Windows XP.
*which is not the problem.