The best option here would be to conduct what is called the "repair install", where only the basic and essential system files are replaced without making any other files or folders. When booting from the installation disk you choose the first option to start this facility, where fast and the installer should ask if you want to repair your current installation. This is a quick way to fix damage and / pr missing system files with the preservation of data. This also require the relocation of some programs as well as Service Pack 2 if not included with the installation disk. The other, but not the best advice is the start of the manual XP system restoration process in the recovery of the console. However, the instructions in the following article :
http://www.michaelstevenstech.com/XPrepairinstall.htm is the better method over a limited.
Use of the system restore using the MS instructions found at : http://support.microsoft.com/default.aspx?scid=kb;en-us;304449&sd=tech
1. Insert CD`s Bootable Windows XP
2. Then choose --> Repair "r"
3. Select drive you want repair --> 1: c:\windows (enter)
4. Goto folder : c:\windows\system32\config\
rename c:\windows\system32\config\system system.bad
rename c:\windows\system32\config\software software.bad
5. And then go to c:\windows\repair
copy file "system" and "software" to --> c:\windows\system32\config\
c:\windows\repair\>copy system c:\windows\system32\config\
c:\windows\repair\>copy software c:\windows\system32\config\
6. Remove CD Boottable from CD-Drive
7. Exit and done
Source : http://dhuwuh.blogspot.com/2008/12/missing-or-corrupt-cwindowssystem32conf.html