XP Recovery Hanging

[beamuse]

HI ALL!
My present problem - I ran a System Recovery both from the disk and from the partition and in both cases all goes well, I get to restart into user partition, windows boots and when it comes to the screen where I click finish the comp hangs. Sometimes it continued working other times just froze there. Is there something I am not doing or can do different? I tried f8 during boot up and tried to start in safe mode. I got the message that the Windows\system32\config\system was corrupt or missing and to run setup again.

My last backup was in June and I would like to know how to get my data off the hard drive before I do a complete wipe. Are there any programs that I could download that could bypass bootup and read the hard drive directly or exaclty how does one get data off a drive that is not working?

How did this all start you ask?
Installed SP2 - changed security settings in OE and IE, turned off firewall and AU.
Links not working in OE, Windows Media and IE shortcuts to desktop
Checked regserv dlls and registry entries and tried numerous other fixes
Decided to do a System Restore back to just after installing SP2 to make sure that was indeed the problem
System Restore froze up and had to do a manual reboot.
System would not start
Used Backup Cd to do a system recovery and that brings me to the above problem.

Give me your best shot, I have nothing to loose now as I am heading for a complete reinstal anyway.

Beamuse

Computer Info:
Home network and behind a Dlink DI624 router with an advanced firewall. I am using Avast Antivirus and keep my system clean with spybot, adaware, and have winpatrol and spyguard installed.
Windows XP Home Edition Service Pack 2 (build 2600)
Compaq Presario
2033 megahertz AMD Athlon XP
128 kilobyte primary memory cache
256 kilobyte secondary memory cache
Bus Clock: 133 megahertz
BIOS: Phoenix Technologies, LTD
40.00 Gigabytes Usable Hard Drive Capacity
CyberDrv CW058D CD-R/RW [CD-ROM drive]
3.5" format removeable media [Floppy drive]
608 Megabytes RAM
DLink DI624 Router with advanced firewall
Dlink Wireless ethernet card
ADSL internet connection

[dlh6213]

read the hard drive directly or exaclty how does one get data off a drive that is not working?

I can't help much with your main question, but as for this part, assuming the drive is working and just won't boot, you could put it into a computer as a slave to retrieve the data (or put it in an external USB case).