OK, i think i got all the relevant infos now... * on the 1st boot it prompts me to choose the install phase (TEXT or GUI). i think default was TEXT. anyway, went w/ TEXT 'cause this was the 1st boot. * everything goes fine and the blue setup screen comes up w/ the following partition info: 3813 MB Disk on disk [MBR] U: Partition1 (USB-XP) [NTFS] 3812 MB (3127 MB Free) Unpartition space 0 MB 39261 MB Disk 0 at Id 0 on bus 0 on atapi [MBR] C: Partition1 [NTFS] 39253 MB (38631 Free) Unpartitioned space 8 MB * selected C: and resumed from there. * left the existing filesystem (NTFS) as it is in C: and it went on to copying the setup files but then... "Setup cannot copy the file NTLDR... to retry, press ENTER... ESC... F3 to quit." * after hitting ESC it went on to say the same thing about NTDETECT.COM then ATABOOT.SYS * then i got the following: "Setup cannot configure your computer to start Windows XP. There may be a problem with hard disk containing drive U, or U may be corrupted. Setup cannot continue. To quit setup, press F3." btw, my BIOS lists the USB stick as a HARD drive when choosing the boot priority as opposed to REMOVABLE drive. does that make any difference? thanks again.