This STOP error is caused when Windows cannot verify the integrity of the named file (in this case ntdll.dll).
If you are installing Windows XP from an installer CD then check that the compact disk is not scratched as that can cause this error.
By burning the ISO image to a fresh CD I was able to solve the problem and install Windows XP. For this reason, it is a good idea to create an ISO image backup of your original Windows installer CDs so that you can create copies in case you scratch the original.