Jay529, after evil_fantast's post you may well have fixed the problem, however, this is a fairly simple thing to sort. Usually the problem that you have lies with the CD that you are trying to use, if it is getting all the way to the last stage as you say then there's a problem where the files are now not quite making it to the HDD thus causing it to not respond / crash.
So boiling it down to the greatest affectors, which are the CD or the HDD. You say you've tried cleaning the CDROM's laser & maybe even the CD, although if there are any scratches and the CDROM being at all old, it may never get over the scratch. On the other have it could always be the HDD which has the problem, there could always be a damaged sector somewhere which the XP installation wants to overwrite but can't and once again causing it to crash.
However not to completely rule out any other hardware that could be causing a conflict at the point where the installation gets to. So try to make a note of the last or next thing the OS wants to detect and check it out.

Now, there is one problem i've just thought of with evil_fantast's suggestion, which is that the computer would have to make it past any boot sector problems to get to where your problem is. As I don't know if it's worked or not I shall keep my suggestion down to the minimun, which is!... Try and get hold of another CD with XP + SP1, if poss ;-P

I have actually come across this problem myself before however I can't remember what I did but it wasn't a problem for very long, infact all I probably did was restart the computer, but then I try to make a point about keeping my machine as clean as possible.

Coffee.