Found this whilst trawling the net -
'we correctly determined that the cause of all these disparate "hung at Mup.sys" failures were actually caused by problem with the Extended System Configuration Data (ESCD) stored in the system BIOS.
The ESCD maintains a static list of Plug-and-Play resource allocations. This avoids recalculating all the allocations at each restart. If the ESCD gets corrupted, then the operating system cannot assign resources correctly. Windows makes this resource decision just after it loads the Mup.sys driver because that's when it loads the Advanced Configuration and Power Interface (ACPI) drivers.
You can download the (mercifully short) ESCD specification from
http://download.microsoft.com/download/1/6/1/161ba512-40e2-4cc9-843a-923143f3456c/escd.rtf.
Once we knew that something in BIOS might be causing the problem, solving it was a snap. We downloaded the most current firmware revision from Dell's web site and flashed the BIOS and that was that. (Some motherboards come with an ESCD rebuild option in CMOS, so it would not be necessary to flash the BIOS.) The system booted without a hitch and performance was right back to where it had been before the problems started.'
So it seems it's a problem SP2 has with some motherboards and that resetting the BIOS or flashing the BIOS solves the problem.
So the options are -
1. Try to reformat and cross your fingers.
2. Look for the ESCD rebuild option in BIOS as mentioned above
3. Reset the CMOS by taking the CMOS battery out for about 15 mins.
4. Flash the BIOS (Only if you know what you are doing!)
5. Try reinstalling XP without SP2.
Hope any of this helps and good luck!