You can "delete" the C: partition and leave it as unallocated space, but as a first step you will need to format it.
On some motherboards with some XP installers the HDD will not be "seen"
if the HDD is a SATA HDD.
the work around to this is NOT a driver on a floppy, but to format a sufficiently large partition onto the drive before running the installer.
Because what "some" installers will not see is an unformatted SATA drive
Then again neither will my favorite Debian/Linux based cloning software, Clonezilla
So yes you can delete your C: partition to remove all the data
then run the installer after you've formatted the drive, but I suspect that if the installer crashes that the portion of the drive where your C: drive
is happens to have a serious error on it.
My knee jerk reaction when I have an installer problem is try a different (KNOWN good) HDD, and if that works the original drive is only good for it's data partiton.