Right at the beginning it asks about formatting, I guess you missed it. That would remove the old XP install. I would recommend unplugging the E drive and install XP on c again paying particular attention to the format screen where it asks about the partitions. With e disconnected there should only be one partition available so delete it, create a new one, format, install etc.
Plug the back up drive back in, copy over the files you wish to keep to c drive, the right click MY Computer, select manage, disk management, select your E drive, right click, select format, when format is complete replace your back up files to E.
P.S. I have inadvertantly done this myself,

but in my case I lost all info on the back up drive as I wasn't paying attention properly and formatted the wrong drive,
Unplugging the back up drive removes the chance of this error happening
