Try the Knoppix CD- you may very well be able to access the data through Linux. YOu'll obviously need some backup media to rescue the data
to, but Knoppix should automatically set up networking and CD-burning for you, so those are two options. Knoppix probably
won't be able to do much in terms of repairing your Windows install, as Linux has very limited support for writing to NTFS-formatted volumes.
Just FYI:
1) "
missing or corrupted \WINDOWS\SYSTEM32\CONFIG\SYSTEM".
The windows\system32\config\system file is a component (called a "Hive") of the Registry, and yours appears to have become corrupted. The hives are unique to the system on which Windows was installed, so you cannot just replace them with copies from another computer.
* Booting into the "Last known good configuration"
might do the trick, although it often doesn't. It is the
easiest fix though, so it's worth trying.
To boot into that configuration, start tapping the F8 key right after your computer starts up (that is- well before you see the Windows startup graphic/logo). This should bring up the boot options menu, where you can choose the "Last known good" menu item.
* There are a couple of other ways to fix the corruption, which are discussed in these links:
http://www.kellys-korner-xp.com/xp_sys32.htm
http://support.microsoft.com/kb/307545/en-us
2.
Hal.dll-related errors can be caused by a few things, including a pooched MBR or a corrupt boot.ini file. The BOOTCFG, FIXBOOT and FIXMBR tools available through the recovery console on the XP install CD
may fix the problem. More info
here.
Unsolved 
