Can't run XP programs on older Dell machine

I have an older (~ 8 yrs) Dell machine running XP. I have started noticing
issues with running XP programs. If I try to run something like Windows
Update or Windows Catalog from the start menu, I can hear the hard disk
spin for awhile, but nothing comes up. I can start other programs like
MS Office or games from the start menu without problems.

When I run Internet Explorer, I get a message in the tab that says
"Security Settings at Risk" and no web page appears. I have to shut
the program down with Ctrl-Alt-Del.

This machine has a wireless connection to a cable modem through a Linksys
router. I can ping the router and DNS successfully.

I thought about reinstalling XP, but when I put the XP disk in the CD-ROM
drive (Yamaha CDW2200E) the program tries to start but nothing ever
comes up. When I go to My Computer and browse the drive, it doesn't
show any files. I can put other CDs in the drive and explore them fine.
I can put my XP disk in another computer and browse it fine.

I had uninstalled Norton 2003 from that machine, but I tried reinstalling
and doing a full scan. It wasn't able to do a LiveUpdate, so the virus
definitions are old, but the full scan found no viruses.

I wasn't sure where to post this, so let me know if there is a better
forum for my question. I would appreciate any recommendations on what
I should try to get my machine working again.

Either something is really messed up with your Windows install or your hard drive is failing. If you have anything you want to keep... now would be a great time to back it up.

Since your installation CD is now readable I was thinking along the lines of doing a Repair Re-Installation of XP.

To do a repair install: Begin the installation of XP as you normally would if you were installing from scratch, immediately after the F8 MSFT agreement screen, press R to start the Repair.

After the Repair completes all old data will still be there, you'll need all the available MSFT updates, [Except SP3, stay away from SP3 on that old of a Machine, just update to SP2], you can choose the updates from MSFT and bypass SP3, but use the manual Choose button below the Auto install button at the website.

Your machine will run fine without SP3.

Zoron has a good point and I'd run a diagnostic on the HDD, to make sure its OK, diagnostic disks can be downloaded from the brand name HDD manufacturers website and created on the other machine you have use of.