...drivers are installed? Drivers are installed, wireless hardware is found. According to the message i receive when i try to search for the available wireless connections is that i probably have assigned other program to manage my wireless connection. but the xp is just freshly installed and i read somewhere that ACER wireless cannot be configured by windows. Please help me with this !

try this http://support.acer-euro.com/drivers/notebook/as_5520.html

installing the vista driver on xp wouldnt really matter.....

Well, from what I can see from the Acer website, this laptop was built as a Vista only machine and the drivers are not available for Win XP...
http://support.acer-euro.com/drivers/notebook/as_5500.html

As you will see from the website, it does not list any drivers for the XP operating system.

If the wireless is the only problem, then I would suggest that you install a wireless pcmcia card or use a USB wireless device.

The computer recognizes that there is a wireless device and that there is a driver installed that is supposed to work... only problem that you have is that the driver won't work in XP, only Vista.