Restore failed - reason 0x0000048f

Greetings,
I'm trying to restore the Windows XP OS on an Aspire One, Model ZG5 -

Q. Should it be possible to restore from CDs only?
Using an external USB/CD, I booted with the System Disk and, following the recovery options, was prompted for "Recovery Disk 1" (or similer) where I inserted the CD Windows XP Home Editiion (for distribution with a new Acer...). The restore seems to proceed, Copying 100% of required files from "Z:\Images\", but on a subsequent screen, install aborts and throws error 0x0000048f with a progress-bar at 1%.

OK, so maybe what seemed straight-forward and obvious (based on all previous experience with Windows) wasn't the right thing to do(?)

I've seen many references to USB_Key installs, and am following the instructions here:http://www.aspireoneuser.com/forum/viewtopic.php?f=38&t=8151

Please advise whether a CD-only install should be possible, and/or whether the USB-Key is necessary.

Thanks/Cheers!