ACPI or "Standard PC" ACPI works extremely well with Windows XP, and has been significantly improved upon over Windows 2000.
Therefore, it is recommended that you first try installing Windows XP with the default option, which is as an ACPI computer.
The only time that the "Standard PC" mode can be recommended with XP, is when you are experiencing audio card or other problems (possibly relating to IRQ sharing/stacking), and only when you have exhausted all other possible causes.
If you have one of the more modern motherboards that has APIC capabilities, then it is definitely recommended that you install Windows XP as an ACPI computer.
In fact, installing Windows XP as a "Standard PC" on an APIC compatible computer will probably result in reduced performance and a reduction with overall reliability.
The number of available interrupts is increased from 15 (0 to 15 with irq2 reserved) to 24 or more with an APIC system, when using XP and ACPI.
Indeed, some IOAPIC's have 64 interrupts, and some motherboards have more than one APIC, potentially giving hundreds of IRQ's.
You should find that there is absolutely no IRQ sharing whatsoever when using an APIC/XP/ACPI installation.
If you have an older motherboard without APIC, then it may be better to install as "Standard PC".
However, the bottom line is that if you have a working system with ACPI, then leave it alone. If it isn't broken, then don't fix it.
To find out if your motherboard has APIC, then please refer to your motherboard manual and/or check in the BIOS. If you want to use APIC, then make sure it is enabled in your BIOS.
When installing XP as an ACPI PC on an APIC motherboard, it doesn't matter what the "Plug and Play OS" setting is in your BIOS. XP will override this anyway. Microsoft actually recommend setting this to "No" regardless.
If you do decide to install as a "Standard PC", then follow the steps below.
Firstly, the entry Plug and Play OS in your motherboard's BIOS should be set to 'NO'. Click here to find out why.
During installation of the XP operating system, you will see a screen displaying the message - "Press F6 if you need to install a third-party SCSI or RAID driver". At this point, press the F5 key (this won't be supplied as an option on the screen and the installation won't wait, so you'll need to babysit the installation process and hit the key at the right moment). A few seconds after pressing F5, you will be presented with an option to select either "Standard PC" or "Other (ACPI) PC".
At this point, select "Standard PC".
If you have already installed XP with ACPI, then you can change to "Standard PC" in the device manager afterwards. However, this method doesn't appear to be as effective as disabling it during the install. To do this, Start > Settings > Control Panel > System > Hardware Tab > Device Manager. Expand the Computer at the top of the list and right click the ACPI Computer > Drivers > Update Drivers > Select List > Standard PC. Note that when you reboot your PC, you will need to re-install all of your device drivers again.