Uninstall 7, reinstall XP

I have an older machine, that I have Windows 7 RC Built 7100 installed. I would like to remove Widows 7 and reinstall XP.
There is only one hard disk.
When I run setup on the XP disk, it says that it is an older OS then the current and won't do it.
Booting from the CD with the XP disk on it isn't working. (Bios set)
When I want to un-install or delete Windows or reformat drive C, it won't because I am using this operating system.

When you go into the xp disc do you choose the advanced setting and set up the partition?

Thanks for the quick reply. I was afraid that this will be the only solution.
I have an other machine that will run Windows 7.
The reason that I want to go back to XP are some older games, that just won't work on windows 7.
I have tried the Virtual Machine, but the game's installation CD does not want to read the memory.
Thanks anyhow. Jancsika

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