Ahhh, one of my favorite errors.
Your hard drive is toast.It happens to every hard drive eventually. You need a new drive.
Can you tell if it's spinning at all? When you power your system up, hold on to the drive - is it vibrating? Making a rhythmic clicking/clunking noise? Nothing at all? If it's doing nothing, it might be truly dead. Double check the power connections though. If it's vibrating, that's a good sign - the platters are spinning. It might just be a corrupt MBR (you'll still need a new drive, but the data might be salvageable). If it's clicking in a rhythmic manner, tick.....tick.....tick.....tick.... that's usually a bad sign as well.
I'd recommend NewEgg.com for replacement drives. NewEgg is usually very cheap and they're a pretty reliable company (IMHO). I know that when I've had drives fail, I buy my replacements from them. And my personal recommendation would be to buy a Western Digital drive, as in my 15 years of IT experience, I have experienced the least number of failures with WD drives, both in my personal life and on the job. Of course, if it's *not* the drive, if you buy it locally it'll be a lot easier to return...
The data on that old drive may or may not be salvageable. I've seen hard drives where just the Master Boot Record (MBR) conks out. In which case, you can't boot from the drive (you'll get exactly the message you're receiving) but it will spin up and work in a system, so long as some other drive does the booting. You could test this with a Live Eval CD of your favorite Linux distro; boot off the CD then see if the HD shows up.
Or, after you've got XP installed and running with the new drive, you could try putting the old drive in the system along with the new drive. Make sure you've got antivirus software running on the new system before you do this. Sometimes virii can play around with MBR's and cause the problem you've experienced. That old drive could possibly be infected with something.
Your PC likely has 4 IDE channels (Primary Master/Slave, Secondary Master/Slave), you'll need to make sure that the good-new drive is configured as the Primary Master and then set up the bad-old one as a Primary or Secondary Slave. Sometimes you select this in BIOS, but sometimes it involves jumpers on the drives themselves. The master drive attaches to the end of the IDE cable, and the secondary drive attaches in the middle. Hook 'em both up to power, and away you go. Your PC should still boot off the new drive. If you've led a clean and righteous life, that old drive may just show up in windows as another drive, probably E (if you've got a CD Rom drive for D). Then you can copy your data from the old drive to the new one. I wouldn't trust the old one any longer, though it might be just fine for years to come. Impossible to say. Personally, I wouldn't trust it.
I'll poke around in my computer parts drawer at home and see if I have an old IDE drives lying around. I don't think I do, but I'll check.....
Good luck!
