I would re-install XP after removing any spyware or other non-essential memory resident programs. Hit control+alt+delete (ONLY ONCE) to see what programs are running in memory, write them down, search them on GOOGLE to identify the program running so it will help you remove unwanted programs.
I suspect you have blown some Windows files for any number of reasons - by re-installing the OS will repair many of these damaged files. Also remind yourself that re-formatting is a last resort. A real last resort. If you can achieve any sort of boot your problem is fixable.
That's what I do - I check out every single running process until I figure out which ones I want & which ones I don't want.
I use Webferret http://www.ferretsoft.com - the free desktop search engine - along with Google so I don't lose where I wanted to go. With google, sometimes I forget what I wanted to see when I got excited & went somewhere else. The Webferret helps me see sites which are relevant to my search.
love it.