It sounds like you have an OEM disk that was not configured for that computer.
You need a Retail version of XP.
I think you are right but then I decided to keep that laptop at its original condition. Actually I have one laptop Sony VGN-CR35G with preinstall Windows Vista Home Premium 32 bit wanted to be upgraded in windows 7 ultimate 32 bit because having as usual so many issues with vista. But not able to find driver for this version of Sony PC they said we are not going to support this
Was not able to downgrade also because of this "ASMS Fatal Error" Then finally i restore it with its previous settings of windows vista. in future if Sony provide driver for this version of laptop i would like to upgrade this for Windows 7. any way thanks for your reply.