Maybe we should back up and get a better picture of what is happening.
Since you got a read error on the XP SP3 install CD, could the DVD drive be going out? How old is the system and might other things be going out? You were installing XP just because you wanted to and not because the system was having problems?
But now, you cannot boot to the Windows XP install CD???
You cannot boot to a copy of Windows 7??? What happens when you try? Do you get the Boot to DVD, hit a key message?
As far as the flash drive, do you have the bios set to boot to a USB device? What happens when it set it to boot first?
If your system is older, you might think about changing some components out. A DVD drive is not very expensive, and would be an easy place to start. But you may be having other type of problems, like power supply.
You will have to be able to boot into something to do any repairs. I don't think we can really help until you get yourself in a position to access your system.