Well I am assuming by Mashestomatoes post that the HDD is not seen by the bios at post. In which case hardware problem. Really should have more info...when booting with XP cd how far does it go i.e does it say there is no HDD...or will it even boot from the CD?
One can only go by the info given.
I have had instances where the CD drive is the problem.....among a myriad of other problems software and hardware related.

Actually, I do remember a boot-block virus copped years ago...

Mind you, just noticed the original poster has not once jumped on the clarify any of the Q's at hand. Is the HDD recognised at ANY level. Is the DVD install/recovery disk even spinning up??

Not much more we can do without more info mate

Well, if it boots from Setup CD to the point of checking for installed windows (which comes BEFORE options to format the drive or repair console) and then freezes, then it is most definitely data corruption issue. Not hardware. Well.. at least for a booting part.
Now, reason why the data corruption possibly occurred, that's another issue.

(That's how far my imagination goes based on given facts).

I think that we need to know what is meant by "doesn't boot". The boot process consists of a lot of pieces. Things such as loading BIOS, memory checks/tests, detecting boot devices, loading device drivers, etc. See http://technet.microsoft.com/en-us/l.../bb457123.aspx for more information.

Need to make sure that the boot order in the BIOS is correct. The option should be set to boot off of CD/DVD BEFORE it tries to boot from hard drive.

Press the "Esc" key as soon as the computer starts to boot to see the screens. Do you see anything on the screen? Does it pass the memory test?