there are several methods for working around it. The following link shows most of them.

If you set the password go straight to the "Forcing the Bios-CMOS to be Reset to Default Values" section where clearing the CMOS manually is explained.

http://www.dewassoc.com/support/bios/bios_password.htm

That should allow you to set the optical (CD) drive as the first boot device.

Now, you have a choice of either a repair or fresh installation of Windows OR you can try for a quicker fix.

If you opt to try the quicker fix, that corrupt hal.dll message is often caused by a corrupt or improperly configured boot.ini file that points to the wrong partition. It might also be a corrupt hall file requiring the expaqnding of ntoskrnl.ex_ -- this link ought to provide the guidance you need.
Error message: "Windows could not start because of a computer disk hardware configuration problem" (yours is error message three on the page)
http://support.microsoft.com/kb/314477


have fun