HOW TO: Restore the Operating System to a Previous State in Windows XP (Q306084)
This article describes how to use the System Restore tool to return your computer to a previous working state. System Restore takes a “snapshot” of critical system files and some program files and stores this information as restore points. You can use these restore points to return Windows XP to a previous state. The article discuses restore without being able to start Windows XP and restore while be able to start Windows XP.
Click here for the kb article from Microsoft.