Install Windows XP/7 without a CD drive when the BIOS does not support booting from USB devices

I have a computer that has a dead CD drive in it and it seriously needs a new installation of Windows (XP is on it now, but Windows 7 does not sound that bad). At first I tried making a bootable USB drive, but it does not look like the BIOS supports booting directly from a USB drive.

Is there some sort of boot loader that I can put onto the hard drive first and boot from the USB drive using that? If not, how else can I re-install Windows on the computer?

Edit: The only bootable device the computer has it the network with PXE (although I have no idea how to do that) and it's three internal hard drives

I believe the method of making a Windows 7 installation pendrive should work for a hard drive partition.

I just went for the simplest solution. I don't know why I didn't think of it before.

I just extracted the .iso onto my desktop of the target machine and ran setup.exe. Setup went through fine (I opted not to upgrade and instead everything was moved to a Windows.old folder and Windows 7 was started from fresh).

A couple of hours later and I have turned a broken Windows XP install into a brand new Windows 7 install!

Without CD-ROM or USB I think your last option is a network install (PXE boot).

These articles may be of interest to you:

http://en.wikipedia.org/wiki/Preboot_Execution_Environment

Installing Linux over a network - I know you're after Windows, but just in case.