You should have uninstalled XP home rather than just deleting the Windows folder. The registry still thinks you have two operating systems and is asking you which one you want to boot into.
Try using Add Remove Programs from Control Panel to uninstall XP Home. This may work despite the fact there is no windows folder for it.
For the future, NEVER delete an application folder without first running an UNINSTALL - preferably from Control Panel - Add Remove Programs