The most important thing, in my opinion, is to save your files. If you have a second drive, or an external hard drive, I would borrow another computer, download a bootable CD like Parted Magic, burn to the CD, boot your broken machine from the CD, and copy all the files that you need to your external drive. Do this first, before any process overwrites files that you need.
Once that's done and checked, you don't have to worry about losing data. You could try a Repair Installation from the XP CD, or just wipe the drive and do a new install.
You should probably check the drive to see if it is good. Download diagnostics from the drive's manufacturer.