As an FYI, I found the problem. It was a hardware problem.... the modem. I removed the modem and xp installed like it was supposed to. Now xp has set random passwords. I did find help on Microsoft for this. You have to use the recovery console. At the command prompt, type type setupact.log and press enter. This is where you are supposed to be able to find these random passwords. Hopefully this will help anyone who happens to be as unfortunate as I have been to experience this.
Later.