Downgrade

Hello, i have a compaq presario C700.
after surfing the net and downloading, the has become slower than a wet week even with maintenance.
The current O/S is Vista home and i would like to make it XP PRO. Plus XP uses a lot less memory.
when i put the XP disc in the drive it tells me that the disc is not valid....so how do i format to make it accept the XP disk?
CPU intel celeron 530@1.73GHz duel core
memory 512 MB (pretty pathetic)
your help will be greatly appreciated
cheers guy and gals