Since you can install from cd, yet not read files, might indicate that your XP Pro installation might have reassigned drive letters. If so, then XP Pro might still be able to find your CD, even if you my have mistakenly missed it.
Sometimes, when upgrading from 98 or in your case XP Home to Pro, the drive letters that you 'were' familiar with change...
Ie, XP Pro now sees your cd as drive E: when previously you were able to access your cd by clicking on drive letter D:
Look carefully at the drives available to you within "My Computer". See if another Drive letter has been added, maybe E: or F: and if so, open it and see if indeed your files are still there... For instance, on the upgrade to XP Pro on one of my clients computers, XP Pro found a memory card reader and for whatever (?) reason, assigned it as Drive C: (of course, normally C: is the first hard drive), it kept the CD as drive D: and actually installed XP Pro itself on a new drive letter E:....
If indeed this or something like this has happened during your installation... that would explain why your still able to install from CD... as XP Pro would still find your CD, no matter the actual drive letter. Yet you, when clicking on what you thought was your CD Drive, that Drive Letter might be assigned to some other hardware item which may not have media within it....
Second Possibility, for newbee's (not necessarily you)... Sometimes people access their files from within a program, such as Microsoft Word.... Word by default, only opens files with the .doc file-type. If displaying files by file type, make sure 'all files' or *.* is selected from the 'file Type' selection.
Oh, and on the above client example... I could only get drive assignment within common settings ... Ie C: as the hard drive, by reinstallation of XP Pro with memory card reader disconnected (not installed at all).. and after XP Pro installed, then adding card reader... If someone know why XP Pro does this... I'll be watching...