skatiemcb - I don't know if bcnaster missed the fact that you're trying to load a laptop. The 2.5" drive will not plug directly into your desktop's IDE cable - the connector is much smaller. You would need to find/buy an adapter that let's you do this first. I got one for something like $15 on eBay (and it actually worked!)
Electrically and such the IDE connectors are the same design, and your desktop's BIOS can usually query the laptop drive itself (if it can find it on the cable) to figure out the specs it needs. Sometimes, there's no way to change the master/slave setting on the laptop drive, so you may need to put it on it's own IDE cable while in the desktop.
In your first post though, it sounded like you were hoping to do this using your peer-to-peer setup. I assume you have a LAN card in the laptop? If you can get DOS, NetBUI and the laptop's LAN drivers loaded on it from floppies, then you should just be able to run the MS Workgroup client. The laptop should be able to 'log in' to your XP desktop and point to it's CD to run setup. It won't really be logging in - it just identifies itself as another member of the XP's workgroup.
I think pctechnician is thinking about doing this the way it's normally done in corporate networks - by logging on to a domain server and doing the automated install thing - which get's a lot more involved for sure.
In your case, you shouldn't even need to worry about TCP/IP or anything like DHCP or domains. Your XP box should just see the laptop as another computer in it's workgroup and allow it to connect - providing you had all the appropriate shares and permissions set up. I'm trying to recall the name of the workgroup client install file for DOS... something like mswgcn.exe. It's still on the Microsoft site for download, but they took off the pages that referred to it. It just unpacks a couple of dozen files on your DOS box that let's it join a workgroup.
SESaskDFC - I'm sure EZNos would work, but it's really for setting up a DOS box like a server for a DOS network. This is way more than skatiemcb should need to just get at the CD on the XP box.
pctecnician - does this sound right? I'm pretty sure the workgroup thing is fairly simple from the DOS side and XP shouldn't know/care as long as it's from the same workgroup. Maybe I'm getting this confused with something else?