In the “I’m going to try this tomorrow” department:
Frank Langa of Informationweek has a series of articles on how to repair Windows XP without doing a reformat.

If all has gone as planned, you’ll find all the user accounts and passwords intact, all the hardware devices set up as before, and all the previously installed software still installed and configured. In fact, if all has gone as planned, the only significant change will be that whatever problem your copy of XP was previously experiencing will now be gone!

You now have a range of repair tools at your disposal, ranging from simple on-the-fly fixes such as Registry cleaning and safe Mode fixes to Recovery Console fixes (see links in the beginning of this article) and, now, a nondestructive, no-reformat repair/rebuild option.

With this information, you should almost never have to face a dreaded start-over-from-scratch reformat/reinstall of XP!

Another article describes how to create a Windows XP installation disk which includes all the service patches and updates to XP to avoid having to do the Windows update patching process after a bare-metal reinstall of Windows.

Found these from the very wonderful digg/technology link consolidation service.

This is another argument for getting your machines current to Windows XP Professional if possible. Anything running 256Kb of RAM and 1.7Ghz of processor speed is a good candidate for an upgrade.

There are several purchasing options. You can get OEM upgrades versions of Windows XP from NewEgg for about $140 when bought as a 3 pack. Item #N82E16837102063. Also available as a onese (single copy) from www.buycheapsoftware.com for $137.00 Item #MSXPS2PO. For non-profits, TechSoup has Windows XP Pro for $8.00! (as they say some restrictions apply…). And if memory serves, the open office academic version of XP is something like $45.00.