It sounds like you have XP installed on the same partition as Win 2K...which is unusual.
There are instances where users (including myself) have installed two versions of XP on the same partition, which results in 2 Windows folders. The simple solution to that is to just boot into thei install the user desires to keep...and delete the unwanted Windows folder and then edit the boot.ini file to remove the entry for the now missing 2d install.
XP FAQ, Two XP Installs On Same Partition - http://www.michaelstevenstech.com/xpfaq.html#20
Rather than direct editing of the boot.ini file (after deletion of the unwanted Windows folder), there is an easy way to achieve the same, using the msconfig tool.
Removing the invalid entries from Boot.ini - http://windowsxp.mvps.org/bootopt.htm