Fusion

Can I assume that the Medion CD is the original that came with laptop? I ask because like you, I find it hard to believe that Medion produced it with such a low spec for an XP machine. As it's an OEM CD, if it isn't the one that came with the PC then at some stage the installation will fail.

Assuming it's OK, then at some point in the installation you will get a chance to delete the partition that currently holds XP. If there are any other partitions on the hard disk they should be deleted at the same time. When they're all gone the menu will ask you where you'd like to install your new copy of XP. Choose the empty partition, use it all and then just follow the prompts. It will ask you if you wish to format the partition as NTFS to which you will say yes and then it will reboot. Leave the CD in the drive and then you can install XP.

It's a fair bet that XP won't have all the drivers you will need for the laptop but they should be on the Drivers and Utilities CD. Obviously you will also need SP2 plus a whole pile of critical updates. You might to replace ZA with Version 5.5 of Sygate from here. It's a lot less intrusive and 5.5 is more stable than 5.6.