Iomega Predator CD-RW USB and Installing Windows XP Problem

[Koslov]

I've got a HP NC4000 ultra portable laptop and I'm trying to re-install windows but it does not have an internal CD-ROM or floppy at all. Unfortunately, I've tried three times to install Windows XP on my external USB IOMEGA Predator CD-ROM drive (model: cdrw9602ext-b). The XP installation proceeds normally until I get a blue screen (before getting into the recovery console) or formatting options:

"A problem has been detected and Windows has been shut down to prevent
damage to your computer.

"If this is the first time you've seen this Stop error screen, restart
your computer. If this screen appears again, follow these steps:

"Check for viruses on your computer. Remove any newly installed hard
drives or hard drive controllers. Check your hard drive to make sure
it is properly configured and terminated. Run CHKDSK /F to check your
hard drive corruption, and then restart your computer.

"Technical information:
*** STOP: 0x0000007B ..."

Is there a way to put USB drivers in a custom winxp cd with N-Lite or something?
I really need to format my laptop, my windows installation is totaly messed up.

thanks