This is what i have done, since i know it may not be right, i wouldnt suggest it to you but it will work, no need to format the hard drive or do a new install...
You can do a repair install, which will take out the BSoD. In order to do this you need the CD, and a cd key, if you can not get a cd key. Your SOL. If you can then follow these simple steps. I know down this with the version of your WinXP Pro Cd from the MSDN. Which is legal, since you(your wife is/was a student)
(Recalling from memory)
1. Insert CD and boot to it normally , it will ask if you would like to install or repair with recovery console, do a install. You will see some type of EULA, Agree to it or dont continue to step 2.
2. You will see the partition of your hard drive broke down. Select the partition in which the Windows XP is installed.
3. It should either ask your to replace it or repair it, if you do not see this. You prolly didnt use the MSDN Version of the Windows XP CD.
4. Once you have done that you should continue to a regular Windows XP install. Once you are done, every thing should be as it was before the error /hardware problem occured.
This is very handy if your lost your windows xp administrator password. This is a key commination in which you enter to change the administrator password. im thinking its CTRL+F8 @ the Install part . ( Where you see the green dots going left to right) / Pretty hard to describe. That is it.. If any problems. call MICROSOFT... hehe...