Looks like something is hosed in the 16-bit subsystem.
Couple of things to try.
From your XP CD, expand CONFIG.NT_ from the I386 folder into your <windows>\SYSTEM32 folder. The file may have become corrupted.
Make sure AUTOEXEC.NT and COMMAND.COM are both in your <windows>\SYSTEM32 folder. If not, expand them from your XP CD.
You may also want to run the Repair option of XP setup from the XP CD in case anything else is hosed. I just ran a system repair yesterday and it actually runs through the entire setup process as if you are reinstalling XP so it may take a bit to complete. Don't worry, though, all your existing programs and settings are preserved.