You should have 'wiped' the old illegal XP off the hard disk before installing the new, legal copy. If you didn't do that, best to start all over again.
1. Boot up with the legal CD.
2. delete the existing partition which has Windows on it.
3. create new partition
4. Install legal Windows on that partition.
Your low resolution problem probably means you need to install the correct video driver. You need to know the make/model of the PC if it's a famous brand like Packard Bell, Sony, Toshiba or Dell; or if it's not a famous brand or it was built at home, you need to know the make/model of motherboard.
When you get Windows running, install Belarc Advisor from
http://www.belarc.com/free_download.html
Run it to produce an audit of the components inside your PC. Post the list on the forum with a request for a video driver.