CD installation problem

Hi
I'm trying to install windows 7 on a machine that currently has XP Home on it. I have set the DVD drive to be the 1st boot device in the BIOS, but the machine refuses to recognise the installation disk (Genuine copy direct from MS) - it just skips over it and boots straight into XP. Unfortunately the BIOS does not allow for booting from a USB drive so I am a bit stuck.
I gather from reading other threads that it is possible to boot from a Vista installation disk (yes the machine will recognise this installation disk and boot from it) and then at some point substituite the W7 disk to complete the W7 installation. Can anyone tell me how to do this?
Alternatively is there a way to force the machine to boot from the W7 DVD - it won't run from within XP either. I have tried using an XP boot disk to try and run setup from there but it just comes up with a readme file that says that the O/S needs to support ISO-13346 "UDF" file system.
Grateful for any assistance to get W7 on this machine!

Thanks - according to Microsoft's system checker the system is OK for 64-bit.
I had a similar problem when installing W7 on my laptop (this is a volume license disk) which I got round by using a USB stick for installation. I tried the same principle by copying the DVD (extracted files and burned new DVD) using Roxio creator - however I didn't go the ISO route - needless to say this didn't work either! What difference does extracting the ISO and then re-burning the image make?

1) Check if your bios has an option called "Enable Boot menu". When you enable this option, you can press a key at startup (It may be F12 or vary with your system), that will let you choose the boot device. Select your dvd drive here.

2) MS has configured win7 install dvd in the UDF format, instead of the standard iso format. Some dvd drives may have trouble reading udf drives, which may be your case. Use a program like ultraiso or the ones suggested by Notsograymatter to save your disk as an iso, burn at lowest speed then try the install.

No - BIOS does not have enable boot menu.
So I made a new CD producing an ISO using Magic ISO and burned it using ImgBurn - but still no go, still won't boot. Anything else to try?

Ok, try this method to install from the setup.exe.

Install Windows 7 or Windows Vista on a Pc Without DVD Media - Tips & Tweaks

Now this is really weird.
I booted up the machine using a Vista installation disk, which took me into Win PE. There I was able to use the command prompt to run setup.exe from the sources directory of my Win 7 installation disk. I got the following message:
"This version of setup.exe is not compatible with the version of windows you're running. Check your computer's system information to see whether you need a x86(32-bit) or x64 (64bit) version of the program, and then contact the software publisher"
Now I have already run the MS Windows 7 compatability tool on the system and it confirms that it is OK to run 64-bit on my system (my processor is an AMD x64 dual core 3800+) - so why is it not allowing me to install the x64 version of Win 7?

You cant upgrade from XP 32-bit to 7 64-bit. For that changeover, you need to perform a clean install which will completely wipe out XP and install 7. Solution- Use a win7 32 bit dvd's contents to install. You can use the 64 bit version's key.

Yes I finally cracked it - thanks guys!
Used a Win 7 Home installation disk to get to command prompt then substituted x64 installation disk and it sailed through - it obviously needed a later version of Win PE