GDI32.dll was not found.

GDI32.dll is the 2 dimensional drawing part of the windows graphical interface. If this is missing windows will fail to boot, you may need to download a copy of the file from another PC and copy it back to your PC through the recovery console.

Or instead of copying from another pc, just use Recovery Console and your XP installation CD to replace the file:  

http://support.microsoft.com/default.aspx?scid=kb;en-us;314058
Description of the Windows XP Recovery Console

(You need to make sure your primary boot device is the CD-ROM drive -- go into the BIOS to ensure this, if necessary), boot from the Windows XP installation CD-ROM, then use the EXPAND command, like this:

expand d:\i386\gdi32.dl_ c:\windows\system32\gdi32.dll

(where d: is the drive of your CD-ROM)

Then type EXIT and when the pc reboots, you should be able to boot into XP.

Thanks Lee, I was on the way out the door to an appointment when I commented on this one, never had time to explain it very well. Listen to Lee macspcs, very wise man that he is :)