If your trying to do a repair install and it ask for a admin password, then
most likely your actually entering the recovery console. You don't want
that.
XP Repair install
Press Enter to start the Windows Setup. do not choose "To repair a Windows XP installation using the Recovery Console, press R", (you Do Not want to load Recovery Console). I repeat, do not choose "To repair a Windows XP installation using the Recovery Console, press R".
Accept the License Agreement and Windows will search for existing Windows installations.
Select the XP installation you want to repair from the list and press R to start the repair. Setup will copy the necessary files to the hard drive and reboot. Do not press any key to boot from CD when the message appears. Setup will continue as if it were doing a clean install, but your applications and settings will remain intact.
This from
HERE with alot more details; please read!
Just BTW if you never set an Admin password hitting enter should pass; although as mentioned above Repairing XP does not require a password.
I just wonder when you say you tried to re-install the 1st time was it a clean install you tried? This may have already formated your drive.
And yes you can remove your drive. Check your manual for details.