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You can try it again and note what it is that leads to this problem. Can you reboot after booting XP the first time? Does it happen after installing the chipset software?
Also, with laptops, I've found it's better to only use the SW (storage drivers, graphics drivers, etc.) provided from the laptop vendor's website. They should have been tested with your model.
Why are you using WinSetupfromUSB?
I have a ThinkPad T60 and to install XP from fresh you first go into the BIOS and change the SATA controller into compatibility mode. This is because the laptop has no floppy drive so doing this navigates around the SATA driver that need to be added when XP installs. Then you can use an XP CD to install XP normally.
After XP has installed and is working, you run the Intel Matrix Storage Manager 'preparation' batch file. This prepares the system to be switched back into AHCI mode, which you can now shut down and do. Once turning back on, XP will have found some new hardware which is your IMSM driver. You can then install it properly.
If you do not do this in this order you will blue screen upon boot because XP cannot access the hard drive as there are no drivers installed.
Read thoroughly the read me which comes with the IMSM on Lenovo's site.