TriggerFinger

hi bobdylan,

have you tried using another operating system like a linux live CD? it looks like hardware but as you said, it happens only when loading XP. so just to narrow down the list of probabilities, d/load Ubuntu and burn the image into CD (link on sig. below). boot with the Ubuntu live CD and see if you still get the 'freeze' and if you need to press the area left of the mousepad.

do post back your findings...

EDIT:
take this chance to run diags on your RAM modules too. AFAIK Memtest86+, a diagnostic tool for RAM is packaged with the Ubuntu live CD. It will be one of the choices once you booted on the live CD.