Can I reload XP through the recovery console? Is there a way ? I am still bumfuzzled at why setup cannot read CERTAIN files.
I dont think you can reinstall XP through the recovery console. I'm assuming by the setup that cannot read your files, that you mean you tried to boot from your XP cd and tried reinstalling XP like that, and then it said it cannot read whatever file.

That could be a lot of THINGS from an faulty optical drive to an overheating CPU. Yes, I've seen that kind of error because of an overheating (I think) CPU.

Could you give more details about your PC, specs, did something weird happen recently, power outage, why did you want to reinstall XP in the first place?Inspiron 9300, pentium M chip, 100 gb HDD, 2 GB of RAM, with all the oem crap that DELL includes. I was looking to loose some unnecessary drivers and extraneous software when I set out to reformat my HDD. the system was 1 yr old last month and I was tired of being slowed down by all the useless JUNK that Dell thinks everyone needs. I dont think the CPU is too hot I keep it about 70 degrees in the house and the unit is on a glass table over an AC vent. there is NOTHING to obstruct the air to the vents on the machine. And the DIAGNOSTIC utilities I have run say that all the hardware is fine..... I am just perplexed.