I would say to adapt that to work without a CD drive all all would be to (As I suggested previously) connect the HDD to another computer (just get a cheap USB2 2.5" HDD Case)
Format it with a bootable DOS system. Open a Command Prompt on the PC you are using, and type "format drive: /s" to make it bootable.
Copy the XP install files over to the drive in a folder. Make sure the folder name is 8 characters or less (like "XPsetup"). Also copy over smartdrv.exe to the root directory. You can get it here: http://files.filefront.com/SMARTDRVE.../fileinfo.html
Put the HDD back into the laptop and turn it on. It should boot to the command prompt. From there run "smartdrv.exe".
Then start the XP setup by typing "cd xpsetup\i386" then "winnt". Then follow the rest of the info on the page posted by Esquire.