One other suggestion is to repair the existing installation with an XP disk. Put the XP disk in the computer, start the computer, start the installation, don't delete the partitions, don't format the drive, instead select: repair existing installation.
But first:
One other suggestion to recover files is to take the drive out, install it as a second drive in another XP computer. Use the functional computer to drag files out of the malfunctioning drive, and to make a backup.
Then reinstall or repair install windows on the malfunctioning drive.
These two ideas frequently work when nothing else will.