Sorry Xlphos, I thought I had replied to your questions.
Does the invalid boot.ini show each time you start the computer?
Yes it did - Not now since I re-installed.
has this happend after the disk image was taken?
Yep
Did you install XP on another drive?
I did yesterday (24/08/09). As mentioned in my OP when XP set up asked which partition to install to it came up with:
IDE HD 1 as C:
IDE HD 2 as D:
SATA as E: <-- Current XP Install
So I continued a fresh install on C:, when finished and rebooted the system went straight into my SATA Install of XP (the screen that asks which OS to boot to didn't appear). I searched for the boot.ini file on my SATA drive and it was not there.
However I do re-call the Setup didn't seem to see my SATA XP installation, meaning normally if setup detects a windows installation you normally get a screen asking these questions:
These are from the top of my head
Install Windows XP, Enter to continue.
Repair existing Installation, Press R
Quit Install, Press F3
TIA
Darren