Try this before re formatting..
Insert the XP CD in the rom exit from the setup wizard it starts, then click Start>>Run then type SFC /SCANNOW then OK (Note the space between the C and /)
Now if that does not fix it try running a full repair. To do this re boot the laptop with the XP CD in the rom then when prompted "Press any key to Boot from CD" press enter then follow the wizard as if your going to re install Ignoring the page of the wizard then asks you what do you want to do Install or Repair.. At that page click Install then two pages on thats were you click Repair and it will take approx 20mins to carry out this function. You will not loose any data nor any programs so long as you click Repair on the second section NOT the FIRST.