Agreed. Backup and reinstall the operating system may be the best thing to do in your case.
On the other hand, if you elect not to go that route, then I'd actually start off with an antivirus scan. Hopefully, the virus definitions and program updates are recent. If not, then I would set up the hard drive as a slave on another working computer with an up-to-date antivirus scanner to scan and clean any virus infections. If any are found and successfully cleaned/deleted, then many of your problems may actually go away.
Still, I'd recommend just starting over with a fresh install of Windows XP after backing up your files.