Thanks for the help. I was able to solve the problem. I was earlier using Dynet DDR3 rams.
I got those replaced with Kingston DDR3 rams.
After that I was able to install Win XP SP2. The problem was with the Ram - Dynet.
With Dynet I was unable to complete the installation. May be some clash with the frequency or the 5-2-2 type working.
But I am not sure. Kingstone has the approprite frequency and sequence. May be that works in favour of Kingston.
Actually DG41WV supports Windows XP SP2. I checked at the Intel Support page.
See here -
It is compatible with Windows XP Professional SP 2 - 32 bit, Windows XP Media Center Edition - 32 bit,
Windows XP Home Edition - 32 bit as well as Windows XP Professional 64 bit edition.
It is always better to use good quality RAM even if they are costly. That will rule our problems with the RAM.
I checked with Kingston team earlier when I had problem with my DG41TY motherboard where the bus speed was getting limited to 800 MHz.
The problem was when I changed the bus frequency in bios I got a line across the center of the monitor. When I restored the frequency to 800 MHz the line disappeared.
Several people are complaining about problems with Intel boards and many propose updaing BIOS as the solution.
But I prefer to try with the basic configuration as long as possible and to check all possibilities.