I also had the problem when I got my macbook last march. (It's not uncommon since Leopard as it seems). Back than I did some research and found a website with a workaround. Though I never tried it because I decided that a virtual machine is enough for me.
The link is in german:
http://www.le-phil.de/index.php/2008/01/17/os_x_leopard_bootcamp_funktioniert_nicht
But here's a translation of mine for everyone who doesn't speak german:
1) Get FreeDos: here's a link to the .iso (not the same as in the above link but it should do the trick:
http://www.ibiblio.org/pub/micro/pc-stuff/freedos/files/distributions/1.0/fdfullcd.iso. Now you have to burn the .iso onto a CD. For example with the Disk Utility. Like seen here:
2) Open Bootcamp Assistant and create a new Windows-Partition erstellen.
When the assistant is done with making the partition it will aks you if you want to begin with the Windows installation. Until now you should always have clicked "YES". But this time you have to quit the assistant.
3) Now insert your burned CD from above and restart your machine with the C-key pressed down (which means that it will start from CD)
FreeDos opens and you should see "continue to boot Free Dos..."
Press ENTER
4) After FreeDos has load, you'll see a list with 5 options. [Note: I don't now what these options are, because I never tried the method myself, but the guy from the blog above took option 5]
Now the normal DOS command line should appear.
Now you have to format the C-partition with "format c:" (withouth "" of course)
You have to verify with "YES"
Before you can format, you have to give it a name, just type in "BOOTCAMP"
Now you have to restart your computer. After OS X has been started, start the Bootcamp assistant again. And there you have to continue the Windows installation (open Bootcamp->Continue>Begin Windows Installation. Now insert now you Windows XP SP2 CD).
Now you shoudn't get the errors and can install Windows as wanted.
End of translation.
So I think you should be able to do it now, please comment back if it's working (or if any steps are missing), as I said that I never tried it myself.