XP on a matsonic

I hope someone can help me because i`m losing the will to live !!.
I went to install a copy of XP on my mates pc, I ran the upgrade advisor before hand and it reported some software incompalbities but no hardware problems, BUT everytime i go to install it, i boot from the XP cd it displays installing windows drivers at the bottom of the blue screen, then everytime it gets to the message STARTING WINDOWS it hangs !!
Even tried starting ME and running the setup program from there, but the same thing happens !!

Any ideas ?

Hardware :-
Matsonic MS8127C+ (200FSB) with AMD Duron 900Mhz
+ On board sound
256Mb 133 Ram
20Gb Hard Disk
Asus Geforce 2 MX 400 32Mb Graphics Card
External 56k Modem
Lite-on 12x10x32 CD-RW

He`s got Win ME on there at moment and that works fine, but he really wants XP !!.

Any help would be great because I`m lost !!
I tried BIOS updates but there isn`t any

Cheers