Make sure the BIOS is set to boot from the CD (put the CD above the HD in the boot order)
Insert the XP CD and boot to it
When you see " To setup Windows XP now, press ENTER", go ahead and press ENTER
You will now see an option to repair Windows by pressing "R". Do not select this option - it will only take you to the Recovery Console which is not what we want to do. Instead, choose to continue the installation
When you see the license agreement, press F8 to agree
On the next screen make sure your current XP installation is selected and then press "R" to repair XP
At this point XP will begin to install on top of itself, replacing damaged, missing or altered system files. Follow the instructions on the remaining screens to complete the Repair Install. It will look very much like a normal (new) OS installation.

If all goes well your repaired XP installation will remain iintact, keeping your personalized settings and installed programs as they originally were. Remember, choose the second repair option, not the first.