I would suggest pulling the drive from the crippled machine and placing it in an anti-virus & Windows updates current PC as a secondary, non-boot drive (non-critical PC, like your brother-in-law's) and then scan the entire drive for viruses and worms. Be sure to isolate the internet from the host before placing your drive within. (pull network cables or modem connections).
If nothing is found, you may only need minor Win XP brain surgery on the registry to correct the damage. (Please repost for a primer on same)
You may need to repair the Windows installation if the machine will still not boot after surgery with the original installation disk.
Please backup your favourites, emails, address book, my documents etc before proceeeding with any repairs onto CDs.
Good Luck!