If you have the XP CD, you could try the following.
From RUN, type in sfc /scannow and press enter
NOTE: the space between sfc and / in important
The will check your system and if any windows files are damaged, corrupt or missing this will repair /replace them.
As you have upgraded to IE8, the Win XP CD may be marked as out of date, if so this will not work and may make your machine worse.
Ask for advise from other users.
Try going back to IE7, (Control Panel / Add-Remove), to see if this helps as IE8 may be too powerful for your machine to handle.