Thank you to all those who posted before me about this issue.
Like most reading this post, I too had the error start occurring on a 2 year old Hitachi 160 GB drive in a Dell Precision M60. I read all the posts here and tried all of the possible windows solutions listed except the Bios one because the computers types are different.
It is true that YOU CANNOT boot from a Windows XP Full Version SP3 CD once your computer has this error on it.
It IS TRUE that if the hard drive is installed into an external USB carrier and a working windows hard drive is used to access it, files can be recovered. So stop crying.
Now back to the question of "What causes the error?" Let's start on what it is not caused by.
I went out and bought a new WD 160 GB after I thought the Hitachi 160 GB had some how partially stopped working. It was lucky I had again backed up my entire computer right before this error happened. It was easy to recover back to exactly the way the computer was at the time of the back up.
I. New drive replaced the old drive in the computer.
II. Boot with Acronis Home 2009 Recovery CD. Make sure the external USB hard drive with your Backup is plugged into the computer before the computer is booted. In some cases you have to determine which key on your computer allows your system to boot from the CD drive before it tries to access the new or non bootable hard drive.
III. Choose the last back up on the external hard drive.
IV. Select restore. The process for approx. 60 GB took about 30 minutes.
V. Exit the Acronis program when the recovery is completed.
VI. Remove the CD before turning off the computer.
VII. Turn off the computer.
VIII. Unplug the external hard drive
IX. Turn on the computer and it should boot as normal IF THE PROBLEM WAS REALLY the hard drive. If it was not the hard drive then the error is either in the software that was backed up or the computer's mother board.
In this case the error seemed gone but occurred again after only powering the computer on and off about 4 times. There is very little chance a NEW hard drive will fail after only 4 starts. The motherboard has not ruled out as a failure option yet.
My computer is backed up once a week. I repeated the earlier process of restoring my computer from a time backed up 2 months earlier. Remember, all of my personal information is already in a place where it can be recovered so there is not a risk of losing data when performing this.
The restore process completed and the computer has been on and off over 20 times testing various programs along the way. If the motherboard was the problem then it really would not matter what hard drive was restored to or what backup was used to recover the computer with. If the motherboard was the cause it would have been impossible for any of the methods tested to work.
This process of elimination leads me to believe the problem is software related. Had I tried this on the Hitachi; I probably could have recovered from the issue without the expense of a new hard drive.
The Acronis program will allow the user to look into the old backups and determine the programs installed at the time of the backup. The process takes longer and could provide what programs were most likely to have been involved during the time the Operating System error occurred.
The point - The error is not the motherboard, the chances of the error being caused by the hard drive have been ruled as very slim after extensive testing. Unless you want to take on the responsibility of a incorrect bios setting, stay out of the computers bios.
History - I have lived through some of the worst disk losses. So will you.
If you want to keep from having your heart come through your chest when a crash like this happens BACK UP REGULARLY. The question from many of you is, "With what?" I tried a few recovery and backup programs but the one that works to get through this error and other catastrophic errors encountered was the Acronis product line. After 6 years I decided to rebuild my hard drive from scratch in Jan. 2010. At least I knew the programs that I would use and the ones I will not by this time.
Items needed for recovery
1. Working External USB hard drive (not a memory stick or flash drive.)
2. Back up software that works as well or better than Acronis Home 2009. This is a Linux based product that works in and out of Windows XP. (The software will allow you to burn a recovery CD - in valuable)
3. Patience (a must have)
A. From a Windows XP Pro SP3 CD install the software to a new hard drive using the format option.
B. Allow the computer to access the internet and it will install all the updates needed for your computer. This will take more than one time of the computer being turned on and off. In fact it will take several times.
C. Put all the software on the computer that is desired that does not require the internet to install it first. Verify each program functions prior to installing the next program. Some programs will require activation online. Only turn on the connection to the internet when this is required and the internet connection off again when the activation is completed.
D. ESET is the preferred Anti-virus and Firewall protection. Include Acronis Home 2009 or current version as one of the installed programs. A must for recovery issues.
E. Once confirmed all components are working correctly. Back up the computer and save this on the external USB hard drive. Do not delete this because later it will be able to get you back up and running again in a short time.
F. If you're an old dog like me here are couple of new tricks. To keep you from a heart attack when your hard drive dies. Learn to store your personal files on a USB thumb drive. One I prefer, because of the warranty, is Corsair. There are others but that 10 year warranty is a big plus and yes they honor it (experience talking here). Warning, don't bend the connector to the point of breaking the wires internally. You may not get your data out if you break off the connector without incurring some real costs. They come in sizes from 32, 64, 128, and 256 GB. That is a lot of data, pictures, and movies that can be stored. Let your computer be the brains. Keep your data off of a hard drive with moving parts unless you need it there for accessing speed reasons. When you finish the project copy it back to the the thumb drive for safe keeping.
G. Hard drives with moving platters have a MTBF (mean time between failure) of 3 to 5 years. In most cases, 30 days after you realize the warranty expired. By comparison Flash Drives double that. Solid state Drives I have read have a MTBF of 100+ years. They are offing a lifetime warranty.
H. The sad part about giving this information is that usually by the time you looked for it you were not prepared for what happened and you have gone through a lot of heart ache. I hope this helps. God bless the USA.