Home Premium is not suitable for XP Mode but you may be able to use other Virtual Machine software.
Windows Virtual PC
Download Windows XP Mode
http://www.microsoft.com/windows/virtual-pc/download.aspx
Windows XP Mode (Windows 7 only, but not any of the Home versions) "You are not eligible to download Windows XP Mode. You must have Windows 7 Professional, Enterprise, or Ultimate to run Windows XP Mode".
Virtual PC 2007
Running Virtual PC 2007 on Windows 7
http://blogs.msdn.com/virtual_pc_guy/archive/2009/08/19/running-virtual-pc-2007-on-windows-7.aspx
This covers the whole gambit of virtual machines in "Home" versions if you want to have a look at it. Of course you will need a licensed copy of XP to install and run in any of them (except XP Mode).
VirtualBox is an impressive VM contender
Here are a couple of posts about error 105, it may be a problem with language files (.lid)?
Error 105 and Setup.lid file
Windows 7 Error 105: Setup is unable to find installation languages