I'm guessing that it now says something like "No Operating System Found" when trying to boot WITHOUT a CD. However, if the same thing happens when you try to use one of the install CDs, there is either something wrong with your CD drive, or the computer isn't trying to boot off the CD.
The easiest way to diagnose this would be to get another bootable CD you know works in another computer, and try it in your laptop. I'd recommend a Linux live CD, like Ubuntu from ubuntu.com. If you can get ANY other bootable CD to work, then the CD drive is good, and your XP and Vista discs could be bad. If no other CD will work, you have a bigger problem. Here are some things you could try if that's the case.
When you first turn on the computer, it should probably display the Acer logo. Somewhere it should say "Press *some key* to enter setup/BIOS". Press this key. BIOS will have to be navigated with the keyboard; usually the arrow keys and the enter key do most things.
First, you want to see if the computer is even recognizing the CD drive. If you find the list of drives and it lists the hard drive but not CD drive, that's your problem for sure. The CD drive is somehow broken or disconnected.
If the CD drive IS listed in BIOS, the laptop may not be trying to boot off of it. Try to find the boot order menu, and make sure the CD drive is listed ahead of the hard drive. You probably want the CD drive to be the first boot device.
If the CD drive is listed in BIOS and is set first in the boot order, but the computer will not boot off any CD, you have a hardware problem. It's likely that the CD drive has failed, but it could be other things, like memory somehow getting disconnected, or the motherboard going bad.