try booting from your CDROM using your WinXP setup disk, reinstall windows, no need to reformat your computer, yet. See if that works.
Instead, if you know how to use System Restore from Control Panel > System, use that. Since you can't go into windows, try going into Safe Mode, then see if System Restore helps. I'm not familiar with this though. If this method doesn't work. Use the one I suggest as above, reinstall WinXP.
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