corrupted registry and missing repair file

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Guest

I've gotten the message that reads: Windows XP could not start because the following file is missing or corrupt: \WINDOWS\SYSTEM32\CONFIG\SYSTEM

So I tried using this to fix it: http://support.microsoft.com/default.aspx?scid=kb;en-us;307545&FR=1&PA=1&SD=HSC

But while in recovery console when I try to backup the system file to the temporary folder, it says it won't copy, and later when I try to copy the system file from the repair folder to the normal one, it says there is no system file in the repair folder. Obviously, all of the other files work fine during that process. I'm reluctant to reinstall windows this soon into the problems, so any advice that can help me salvage my files would help.
 
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After trying and failing most the options offered in previous threads, what are the chances this is a hardware thing? What then?
 
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