Cannot setup XP from CD-ROM

I just did my first install of WinXP, right on top of my old Win95. Everything is working fine, but I want to clean out all of those old files. So, I want to format my HD, boot off of CD-ROM, and reload.

The problem is that when I boot off of CD-ROM, WinXP "Setup" starts loading all of its drivers and part way through it just hangs. Then after about a minute it says that setup has failed. What is even more confounding is that I tried it twice, and it hung up on different drivers (the first time it was a SCSI driver, the second time it was a USB driver)!

I am suspicious of a hardware problem with my CD-ROM. It is a Memorex 40x (model CD-402E). It has acted kind of strange for a long time. If you eject a CD, the door often opens and then shuts itself immeadiatly. And when I load applications, the drive speeds up and slows down, over and over again for no apparent reason. But, I have never before had an application load fail. I've often wondered if I didn't have the drive setup properly, but never had any glaring reason to fix it until now.

Any ideas or suggestions?

My system is a ASUS P2B, Celeron 450, WD 8.5Gig (Primary Master), Memorex 40x CD (Secondary Master), WD 2.5Gig (Secondary Slave), Creative Labs Geforce 256, Diamond Sonic Impact s90.