Sonic 3D Blast was made for Windows 95. Possible causes of error that come to my mind:
1. Modern Windows (Yes, XP is modern in this case)→Try a computer with Win9X with a non-USB optical drive because:
2. The USB drive in conjunction with CDDA @Dimensional mentioned. → If the disc is not copy protected, simply create an ISO and mount it to a virtual "IDE"-like drive.
Or search for "Sonic 3D Blast modern Windows" with your favorite search engine and find information in a wiki.