Thanks me1
I think I have tried everything possible from BIOS boot options. Currently booting from USB CDROM (with Win XP software CD). Tried swapping around IDE0: (this was original boot disk) and IDE1:
Tried disabling D2D recovery. Everything leads to Starting eRecovery -- Win XP scrn -- Acer 'Pls Wait' screen - then reboot.
I have now booted from CD into XP repair CMD prompt. DISKPART seems to be limited, it brings up a list of partitions in a square box and only gives me option to ESC or D-delete partition. I typed DISKPART /? and my only options are /ADD or /DELETE
Listed Partitions are:
C: Partition1 (PQSERVICE) [FAT32]
D: Partition2 (ACER) [NTFS]
E: Partition3 (DATA) [NTFS]
Using DIR, both C: & D: still seem to contain all the files. I believe the C: PQSERVICE is Acer hidden partition that contains all files used for recovery. I'm not really sure which partition it is booting from when stuck in this loop (C: I guess)
I have looked in a few ini files using TYPE cmd to try to find out what is making it boot into eRecovery, but can't seem to find it.
There must be a line hidden in a file somewhere that is telling it to boot into eRecovery mode (my thoughts, but I could be wrong

I tried asking in an Acer forum, but they just tell me to buy disks or go to Acer shop.
Both C: and D: boot.ini says it is booting into Windows XP & I can't see anything unusual in there regarding recovery.
Is there another way make Partitions active, or to check which is active ?