Rixx, you don't need the format c:\ part at all.
Just have your PC boot off the CD-ROM drive as the first thing on the list. With the CD-ROM in the drive, boot the PC up and stay by it. After it POSTs, you'll have a short amount of time to hit any key and boot off the XP disc. It'll run some initial setup stuff and then ask you about installing XP. At this point, you'll have very limited options: Install XP, Repair XP, or Quit the install. You want to install XP. Then you'll have to accept the License Agreement by hitting F8. At this point, it'll detect your hard drives, and give you some options on formatting and deleting partitions. If you have any partitions you want to delete, you'll have several chances to back out if you accidentally do it.
Going from that (or skipping if it doesn't apply or you don't want to), formatting the drive comes next. You should have at least the option for a full NTFS format and a full FAT format (the FAT used will be FAT32). This will be present if it's a raw, unformatted drive.
I suggest NTFS for better handling of large hard drive spaces and security reasons.
At this point it'll format, copy files, and then reboot. It'll still give you an option to boot off the CD-ROM (unless you change it at the reboot), but don't hit any keys. The XP setup will do it's thing until you are needed.