May I suggest not doing the repair quite yet?
Start, Run, CMD
netsh winsock reset
Wait for XP to tell you that a restart is needed. Restart the computer.
After the restart do a Start, Run, SFC /Scannow
If the XP CD is needed, it will prompt you for it.
This utility does not give you any exciting messages, although it does make entries in the Event Log.
Last, right-click My Computer, Properties, Advanced, and at the bottom click on Evironment Variables. In the lower of the two boxes highligh PATH and click the Edit button.
Part of your PATH string must include: %SystemRoot%\system32;%SystemRoot%;%SystemRoot%\System32\Wbem;
If not you will lose access to the external commands of XP just as you did in your testing.
If this does not help, then do the Repair John was suggesting. A Microsoft Article will give you further details of HOWTO do it:
http://support.microsoft.com/default...b;EN-US;315341
.