I am having a problem with my hard drive that I
cannot figure out. Basically, I need to restore
(change) the volume information without losing the
data that is currently present. Any suggestions, no
matter how far fetched, would be highly appreciated
as I have tried everything I can think of.

Problem description: I was setting up a very old
(circa late 90's) lap top for my friend. I had a hard
time finding drivers for the devices and finally found
a file that you could extract and it would make a
boot disk for the lap top. I accidentally extracted
this file to the hard drive of my computer instead of
the floppy for the lap top. It rewrote all my boot up
files and now my computer thinks the hard drive is
1.4 MB in size (a floppy basically). I cannot see any
system files or anything on my computer beyond the
files extracted. When I put in my Windows XP CD to
repair my installation, it can't see any sign that
Windows XP is even on the computer.

The partition information was not altered. If I look at
my drive with fdisk or within Windows XP (I have
installed a 2nd hard drive as master, leaving my old
one as a slave) Disk Manager, the full partition (120
GB) is shown as the active, healthy partition. It's only
when I actually open the drive and explore it that it
shows 1.4 MB in size.

Help!

I'm not sure this will help, but I'm pretty sure it won't hurt. You could try booting with a floppy and type:
fdisk /mbr
That will restore the Master Boot Record on the first cylinder. It won't change the partition information.

How about doing a registry rollback? You are not sure if the drive is actually intact or not, are you?