Did you take a hard drive from an existing system with XP installed on another machine and then just try to move that hard drive to this machine? If so, XP has to be re-installed. One XP installation will not typically work on another computer. XP is "custom" if you will, to the machine it is installed on. The drivers and settings are configured to a specific machine. If you simply move that drive to another PC the installed drivers and such do not match the new PC and problems are created like what you are experiencing.
If you are getting a "safe mode" suggestion then the bios is seeing the drive and the handoff from the bios to the OS on the drive is taking place but the if the OS is misconfigured then you could see the type of problem you are experiencing.
Bottom line...the hard drive may be working fine but the OS probably has a problem.
