Is your CD not bootable? Most people's PCs are set to boot from CD if a bootable CD is in the drive.
If your's isn't, you can go into your BIOS settings editor by repeatedly hitting delete, F12, F1, or something similar right after either turning the power on or resetting. Then you can change boot order so boot from CD is the first option.
Before you install it, don't forget to back up all the files you want to save (i.e., pictures, music, porno, etc, but not programs).
Then, format the drive from the installation program that runs when it boots from CD, install the OS, go back into BIOS settings and tell it to boot from your main hard drive first, and that should be it (unless you for some reason have the IA-64 WindowsXP64, in which case you're screwed).
NOTE: This will erase your Vista installation. Also, there is no need to do anything with the BIOS settings if you can just boot from CD initially.