Didn't matter. No one cares what I went through -- including a call to Mumbai or Bangalore for MSFT tech support -- but what it took to fix it was a repair install of Windows XP SP2. Luckily I had a disk with SP2 and all the cumulative patches up to a few months ago slipstreamed in, or it would have been the tedious woe of installing XP Original, Installing SP2, Installing all the updates, etc.
Cheers to Microsoft for repair builds working. Jeers to Microsoft for releasing a patch into the wild that will completely fux0r a large number of systems out there. I have many years of experience making computers work, imagine someone's granny who accidentally installs SP3 and can't figure out why here computer broke.
So much for Microsoft QA.