Well...seems to me that Kahdah pretty much ran the gamut of things that could work, short of a repair install effort or a clean install. I certainly can't think of much that you can try without an XP CD.
Your system sounds as if it needs a clean install, but I would try a repair install first. A repair install would leave your data files and programs intact, but would give you a new set of system files. But...a repair install will not correct hardware or malware problems...I think we can rule out malware presence at this point, but the effects seem to be evident on your system.
You need to see if you borrow or obtain a copy of someone's CD (same version, same SP-level) as your system. Using that, with your valid license, we could then try a repair.
I believe you already tried this, but I am posting it for future use by some in similar situations where registry permissions have been changed.
Reset Registry & File Permissions in XP, http://www.winhelponline.com/blog/reset-th...-in-windows-xp/
I see where some suggest that the Dial-A-Fix tool may enable resetting default permissions...but I guess I don't have much faith in a tool's ability to deal with situations that are almost 2010-ish...when it hasn't been updated in 3 years. But...trying it is better than trying nothing, IMO.
Worth reading, http://www.timeatlas.com/useful_utilities/...update_problems