add dual boot XP to 2k3 server – no CD

I have a 2k3 server installed on C: and I want to add an XP OS on D:

The laptop has no floppy or CD and will not boot to USB devices. It is not Vista ready.

I have tried to start XP install from a virtual CD and get scary messages about destroying the 2k3 OS install.

It seems to me that I should be able to install XP to D: from a virtual CD without seriously damaging the 2k3 OS on C:, except possibly the boot files in the root of C: which I can later fixup.

Can this be done and what are the steps?

Thanks.