It looks like 'boot.ini' is messed up. Your best bet in my opinion is to do a repair, the only problem with this option is loosing your XP Updates, around 25 Meg at the moment from SP1 on just the critical ones. Everything else should be as before when completed.
Configure your computer to start from the CD-ROM drive (Boot from CD). Insert your Windows XP CD (Your XP Licence key will be required at some point), restart the computer. When the 'Press any key to boot from CD' message is displayed on your screen, press a key to start your computer from the Windows XP CD.
Press ENTER when you see the message To setup Windows XP now, and then press ENTER displayed on the Welcome to Setup screen.
Do NOT choose the option to press R to use the Recovery Console. In the Windows XP Licensing Agreement, press F8 to agree to the license agreement. Make sure that your current installation of Windows XP is selected in the box, and then press R to repair Windows XP.
Follow the instructions on the screen to complete Setup.