I once deleted some hidden files on my C: drive because.. I was basically being a noob and wasn't thinking. One of those files was NTLDR, which is an essential boot loader for XP. The machine wouldn't boot, did what you said yours was doing. I had to reinstall XP. There's probably a better way, apparantly you found one, but that's all I knew to do. Fortunately there was nothing important on that computer, but man did I feel stoopid.