Have you tried a Repair Install to see if it helps? It might be able to
solve your problem without having to wipe out your system and lose all of
your personal files. Info on it here:
http://www.microsoft.com/windowsxp/using/helpandsupport/learnmore/tips/doug92.mspx
Another possibility is that disk #2 of your boot disk set is bad, or maybe
your download of the boot disk program is corrupted. You can try replacing
disk #2, re-download the boot disk program from Microsoft, and try it again.
If this doesn't work then you can resort to a Windows 98 Boot disk to format
the hard drive (do a quick format as it will format it for Fat32, and XP
uses NTFS by default - it can use Fat32, but it is not recommended as system
performance will suffer slightly). You can get it here:
http://www.bootdisk.com/bootdisk.htm - choose the Windows 98 SE OEM version.
From here, after you format your drive, you should be able to boot with your
XP CD and do a clean install. Here is a good place to get information on
performing a clean install of XP:
http://www.michaelstevenstech.com/cleanxpinstall.html
Hope any of this helps.
-Dan