Can't logon Recovery and Restore and Corrupt Windows XP

[deathgleaner]

I have a ThinkPad Z61m. I was trying to do a Recovery and Restore in Safe Mode, but all of a sudden I got the "blue screen of death". Ever since then, when I try to go into Safe Mode, I get "Windows could not start because the following file is missing or corrupt: \WINDOWS\SYSTEM32\CONFIG\SYSTEM". I put in the Product Recovery Disk 1 and I get the same message.

I tried going into ThinkVantage (by pushing the blue button or putting in the Rescue and Recovery Disk). I put in my Windows Password (for my usual User Name and also for Administrator) and I get "The user has not been enrolled with the Client Security Solution. Only enrolled users may log on or recover their password/passphrase.". I tried checking off "I forgot my Windows Password", and I get "Unable to locate valid key information for any enrolled user. Bypassing logon", I clicked ok and I am back to the same Rescue and Recovery Workspace Logon screen.

I am at a lost. Any help would be greatly appreciated. Thanks.