AFAIK, if you really have the key, you can just get a Windows XP installer, then use the key to activate it. Given the age of your current computer, I'd recommend getting a new one though.
But first things first: have you tried reinstalling Windows XP on your current hard disk? Or trying your desktop's recovery CD? NTFS errors usually happen when some part of your drive gets corrupted, either from accident or because the drive is failing.