I'd start with buying a new hard drive and use the recovery disks to install Windows on it. Then you have a working system again.

The only thing you can reasonably do NOW with the old disk now is to run a chkdsk from the XP recovery console. But with a bad hard disk this can lead to any number of errors and any number of lost files.
So it's better to start all over on a new hard disk and then see how much of the data you forgot to back still can be retrieved from the old disk, either using some DIY recovery software or by a professional data recovery company.