First, exit everything you're doing, because you'll need to reboot at least once. (Maybe twice -- so much for Windows XP not needing reboots.)
Anyhow, go into your Device Manager (from the System Properties screen, Hardware tab...) and find where it has your display adaptor, and delete whatever garbage it has detected as your video card.
Windows will grind the HD for a bit, maybe ask if you're sure, grind a bit more, rebuild the hardware database, and then prompt you to reboot. Do it. (Skipping this reboot is very bad.)
When XP comes back up, you'll be greeted by the "New Hardware Detected" screen. Hopefully this time it'll find the right driver. If not, force it to the directory you extracted the nVidia reference driver to. (Usually c:\nvidia\win2kxp\56.64\ or whatever version you are attempting to install.)
Let it grind away and install. If it asks to reboot, let it. That should be it. Now just go to your desktop properties and configure your prefs.