What you're trying is an "impossible downgrade". The W2k CD installer
hasn't found an officially supported upgradeable system, so it's asking
you to show you're eligible for a normal upgrade, which it will them
attempt.
You can try borrowing one of the suggested CDs (it's required as proof
of ownership of an upgradeable system, but has no other effect). Insert
that CD when asked, then remove it when prompted, reinsert the W2k CD,
and the upgrade-install will continue. I have no idea whether this
pseudo-upgrade will accurately migrate all drivers and settings; it's
something of a gamble. Maybe some more knowledgeable poster will follow
this post up with solid advice. (It may well work; I'm just not familiar
with W2kAS.)
Your other option is a clean W2k install.