It does a repair install. Meaning it reinstalls xp on top of itself, setting
everything back to day one, fixing anything that needs it, EXCEPT, it keeps
all your personal files and such.
There are two separate things: One, Setup and after the license
agreement 'repair installation', reinstalls over the top of the present
one, retaining installed software and settings (but removing all Windows
Updates, including SP1 if your CD does not include that(.
The immediate 'Repair' launches the 'recovery console', which is a very
basic command line means of doing some manual repairs. For what it
supports, look in Help and Support, and search on "Recovery Console
Commands" (include the quotes)
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