Windows will not let you install a system older than itself does not regard it as an upgrade.
Have you got a dual boot system i.e you can run windows 98 or XP? Or did you upgrade over the top of win98 and so can now only run XP?
in the run box, press enter and let system file checker find and replace missing / corrupt file in windows and explorer.
This will take awhile to complete and you may be asked for the CD to be in the drive if windows is not preinstalled on the hard drive.
System File Checker