Error reinstalling Windows XP

Hi,
I will take a shot in the dark. Do you have an IDE zip drive installed? If so, disconnect it and try installing again. Sometimes Windows installs can also be confused if there is more than one drive on the secondary IDE cable. Disconnect any other drive connected to the secondary IDE cable except for the CD Rom drive. I know this sounds strange but, we are talking MS.
It is also best to have only the boot drive on the primary IDE cable.
Should you be using an IDE raid controller or SCSI controller for your boot drive, then install the drivers for these using the F6(?) key at the beginning of the installation.

I hope this helps you.

0xC0000218: UNKNOWN_HARD_ERROR
(Click to consult the online MSDN article.)
A necessary Registry hive file couldn?t be loaded. The file may be corrupt or missing (requiring either an Emergency Repair Disk or a Windows reinstallation). The Registry files may have been corrupted because of hard disk corruption or some other hardware problem. A driver may have corrupted the Registry data while loading into memory, or the memory where the Registry is loading may have a parity error (turn off the external cache and check the physical RAM).
0xC0000218: UNKNOWN_HARD_ERROR {KB 156640} Win NT, Win 2000
How to Recover from a Corrupted Registry that Prevents Windows XP from Starting {KB 307545} Win XP (includes error messages that \WINDOWS \ SYSTEM32 \ CONFIG \ SYSTEM or \WINDOWS \ SYSTEM32 \ CONFIG \ SOFTWARE is missing)
How to Troubleshoot Registry Corruption Issues {KB 822705} WinNT 4.0, Win 2000, Win XP Pro, Server 2003 (computer will not restart due to corrupt Registry hive)
How to Troubleshoot a Stop 0xC0000218 Error {KB 314874} Win XP

Since you are reinstalling anyway, format the drive.