Sounds like something got hosed with all the install/uninstall stuff. Thanks for the good copy of the error message - that helps out a lot! Here's a link to a brief description of it: http://aumha.org/win5/kbestop.php#0x7e
You can try to load the Recovery Console from the XP CD (if it'll let you do that before the crash) and run fixboot and fixmbr. Or (once again, if it'll let you) you can try to run a repair install of XP: http://www.michaelstevenstech.com/XPrepairinstall.htm
If you can't even access that - then it's most likely a hardware problem inside the PC.
To start, try running this free memory tester to check your memory: http://www.memtest86.com/
Let it run for at least 2 hours (overnight is better).
Then to troubleshoot this, you'll have to take most of the stuff out of the PC. First tho' - unplug the PC from the wall and whenever you're inside the case be sure to be grounded to the metal of the case. This will prevent stray static charges from destroying your system.
The only things left should be:
RAM (presumed good from the MemTest application above)
CPU, CPU Cooler and fan
Floppy drive (may substitute a CD drive - but since your problem revolves around a CD I'd avoid it).
Then attempt to boot from a boot disk ( http://www.bootdisk.com/
) into DOS. If you get in, then hook the hard drive up and see if it'll still boot. Then try the CD Drive with the Windows CD and see if you can get into setup. Then just keep adding stuff until it stops working - then you've found the problem.
If the problem still occurs with the system stripped down - then it's likely a problem with one of the components that were present. Try replacing each one (borrow 'em or buy from a store that has a return policy) until you narrow it down.