Cannot Load from harddisk message

I installed Parallels on my Mac OS and and after hitting start on the program, it doesn't recognize the Windows XP disk inside the drive. It keeps asking me to insert SystemDish and press any key. What is wrong?

 

Is it Parallels 4.0 or 3.0?
Also, as I understood you are having trouble installing Windows in the Virtual machine. Can you try custom installation mode and specify on what step the trouble occurs? http://download.parallels.com/desktop/v4/docs/en/Parallels_Desktop_Users_Guide/22437.htm

And you can also try creating an image of the Windows XP CD using Mac's disk utility and try with it. Check the following article on how to do that:
http://kb.parallels.com/en/4664

 

okay....I'm running parallels 4. Now as the Windows XP loads in Paralles, after about 5 minutes of loading the software, I get error codes that says "pciide.sys is corrupted." I also got one saying "ultra.sys is corrupted." What do I need to do now? Thank you for your help.