Here's the issue. After I ran a pc recovery the system rebooted and went to this error. Windows could not start because the following file is missing or corrupt:
<windows root>\system32\hal.dll
Please reinstall a copy of the above file.

Now I know this is most likely an issue with boot.ini. My problem is that my cd rom had milk spilled in it by my 3 year old.
I also never got any copy of the widows xp install disk(as is the new norm) when I bought this pos.
I burned a copy from a torrent but when I put it in the cd rom after changing the boot order to atapi cd nothing happens it just goes to an alpha prompt for awhile then goes back to the message. But that is probably due to the milk.

I have an external cd rom that was installed on the machine before it went down. Is there anyway I can use that?

You know this no win cd when you buy now is a huge pain in the ass......damn you Bill Gates.........d**n you.

Please get your facts straight - The decision to stop providing CD's was motivated by the same reason that they stopped providing printed manuals - the almighty dollar. Most OEM's are required to provide a means to restore the computer - not Bill Gates. Your PC maker chose to save a few bucks by having you make the CD's rather than providing them to you. FYI - you can usually order them from your PC maker for a small charge.

As you cannot legally download a copy of XP (except under certain strictly controlled circumstances from Microsoft servers) the torrent copy that you are using is likely to be illegal. Not much of a problem if you've got a licensed product key - but still something to consider.

But, back to the original issue. This is a failure of the NTLDR stage of the boot process and it occurs just before NTLDR transfers control to the NTOSKRNL (the point where the splash screen appears). At this stage it's loading the System hive for the registry, the boot drivers, ntoskrnl.exe, and hal.dll. All of this is supposed to occur after it reads boot.ini and allows you to make a boot selection (such as Safe Mode). Is this the case with your system? Are you able to access the Safe Mode boot menu?