The hard drive is SCSI partitioned into two

When the computer boots it will not go to the operating system selection screen. It just shows "Operating System Not Found"

..IF...
you put in the XP CD to the CD-ROM, and ignore the prompt "Press any key to boot from CD" the computer gives the operating selection screen and works normally.

no CD, no boot? why?

While this normally doesn't apply to newer computers... older ones had an option to give the hard drives time to spin up... see if you have a boot delay option and try setting it to about 3-6 seconds and see if that helps.