According to the matrix, Oracle8i is not supported on the Windows XP operating system. Only Oracle9i (9.2) and above is supported on Windows XP so you should install one of those releases.
With respect to your second question, I'm not entirely certain I understand your networking architecture, but if you are receiving an "Oracle not available" error message when attempting to connect to the database, either the database has not been started, which means it truly is not available, or you are supplying incorrect connection information and it is attempting to connect to a database that does not exist.
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