You have a corrupted hard disk and since it has lot of bad sectors the installation of Windows can never occur.
Whats the solution ? This was a challenge when I was in Hostel we had a machine which was not being used for the last 1-2year the reason being everytime we try installing the Windows Operating System it would fail with Hard Disk Bad Sector Error. The only solution being to buy a new hard disk.
When you are a student , I don't think you would even have the dollars to spend and buy a new laptop.. so here is hack :)
1. Get Linux Bootable CD
2. When You install Linux you have an option to mark the cylinder with types of file system
3. Mark majority especially from the starting of the hard disk cylinder to EXT3 or EXT4 type of partition.
4. Try to figure out a hard disk space of maybe around 3-4 GB which is enough for XP home or Professional to be set as FAT32
5. After applying the changes just restart the machine without installing Linux.
6. Now when you install windows instead of looking into the other FileSystem, its only going to look for FAT32 file
system and gonna install windows. If you have got atleast 3-4 GB of hard disk which is not having the bad sector, you will probably hit installing Windows OS successfully :)
7. Once installed use utilities like Partition magic to find and hide all the bad sector in the hard disk and probably recover the remaing hard disk space.
It seems to be confusing but the core logic is enforce Windows to get installed in a different area of the hard disk cylinder, the area which is free from bad sector.