Simple, I make sure boot priority is CD drive. I place CD in drive and hole C down while booting.

Nothing, straight into Windows XP oh and boot camp is installed through Windows already - is that the problem infact?

"C - Start up from a CD (if it has a system folder)"
Now my CD does not have a system folder, its OS X 10.5.6 and when I explored it, no folder of this name was found.

Am I missing something here, please help.