Hmm, by any chance have you got a hard drive with an OS on it that you can plug in as the primary drive and the one that doesn't work as Secondary?
If this works, drag all important files off, and then put the one that doesn't work as Primary again.
This is just a precaution, and then place the XP cd in again, and hopefully you can try and repair the installation (which i've heard is an option to do while in setup), which will wipe over the current one, hopefully not losing you any files, and if that works then your sorted.
You'd have to install Windows SP2 on again though i'm afraid.
I hope this helps