Installing OS from an USB flash drive is much faster than from an optical drive.

The most important part in this process is to make your USB flash drive bootable. Follow the step by step instructions from the following link and you should be able to install Windows OS in your laptop.

http://www.askvg.com/how-to-create-bootable-usb-drive-to-install-windows-vista/

PS: Even though the instructions is for Vista, I think it should work for XP as well. The Diskpart command mentioned in the instructions doesn't work with XP, so make sure you have access to Vista. If you don't have access to Vista, try googling if you can find the XP version of  Diskpart

Good luck!