XP Boot Issue with a used machine

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OS - WinXP Pro SP2
CPU - AMD Athlon A64 3000+
Mobo - MSI K8N Neo 2 Platinum
RAM - 1GB DDR400 [Memory Test OK]
Video - ATI AIW 9800PRO 128MB AGP​

I wish I had the time to go through the normal introductions and such, but, alas, a tech issue is what brought me here ...

We just moved and had Comcast Hi-speed Internet Service installed. The next day, after I rebuilt my existing PC system [circa 2004], I found that we couldn't get an internet connection. Consequently, I phoned Comcast tech support and spent quite a while on the phone with them until both IE and OE were functioning properly. Along the way, however, I was told to shut down my McAfee Anti-Virus software, which I did and subsequently forgot about ... Anyway, this means that our used PC was functioning properly to this point. The next day, however, is an altogether different story.

Shortly after starting my machine in the morning, I received the following message on a plain black screen:

Windows could not start because the following file is missing or corrupt: \WINDOWS\SYSTEM32\CONFIG\SYSTEM

You can attempt to repair this file by starting Windows Setup using the original Setup CD-ROM.
Select 'r' at the first screen to start repair.​

At that point, I inserted the original WinXP SP1 disc into my CD-ROM drive and pressed the RESET button on the front of our PC. After that, I entered the BIOS boot menu and set it to boot from the CD-ROM.

Shortly after that, I received the following [perpetual] black screen:

Setup is inspecting your computer's hardware configuration...

Before I flew off the handle and did something I'm sure I'd be sorry for, I decided to do a bit of searching via Google. I did indeed find information that resembled my issue; however, it usually came as tech advice relating to dual-boot systems (Linux and XP combo mostly). In addition, I found an interesting post in which the user "reset" his PC's CMOS to get his dual-boot system running again. Anyway, I never found an article or a post that matched my scenario, so I thought I'd post here before I tried an iffy "similar fix."

In case I haven't been clear about this, the machine in question has been in use since late 2004 and has run XP since I initially built it. Other than the usual software updates, including SP2, it has been fairly reliable. The only real exception to this has been the system HDDs. When the system was originally designed, it was spec'd for two Seagate 7200.7 Barracuda SATA HDDs. A little more than a year after the PC was built, the 200GB HDD had to be replaced by Seagate. About a year after that, the boot HDD, an 80GB model, also had to be replaced.

Considering the signature information I included in my profile and the info in this post, I hope I've thorough enough. I work in an engineering environment, and I often don't get nearly enough data to work with. If I've gone overboard, I was only trying to do as much as I could to inform ...

Thanks very much for your time,
JJ
 
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