Let's try this. Hopefully this will work.
Please install the Recovery Console in to Windows XP, if it needs to be installed. This is a tutorial on it: http://support.microsoft.com/kb/307654
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If you get in to the Recovery Console, here is what needs to be done.
Boot into Recovery Console and log on to the current installation.
When you get to the Recovery Console prompt, type cd \ and press "Enter".
Type cd system~1\_resto~1 and press "Enter".
Type dir and press "Enter".
After you press enter you will see a list of folders (like rp1, rp2) If the list of restore points has more than one page then press the "Enter" key until you reach the end of the list
Type cd rp {number of the second to last folder in the list} and press "Enter".
Note: Example: cd rp9 if the last restore point is rp10
Type cd snapshot and press "Enter".
Type copy _registry_machine_system c:\windows\system32\config\system and press "Enter".
Type copy _registry_machine_software c:\windows\system32\config\software and press "Enter".
Type exit and press "Enter".
Your PC will reboot.
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If you get an access denied error when doing the above, then do the following at the recovery console:
Type cd \ and press "Enter".
Type cd windows\system32\config and press "Enter".
Type ren system system.bak and press "Enter".
Type exit and press "Enter".
Your PC will reboot, go back into the Recovery Console and start from the beginning.