|"To make it worse, the XP professional CD was lost."|
That's not necessarily a disaster. You can use a utility to find the existing Product Key code, if have no idea what it is, that is hidden on the computer (in the Registry I believe; it is encrypted in some way), such as Keyfinder.exe (it also finds other Microsoft Product keys).
You could borrow an XP CD from someone who has the same version she had (with or without SP2 - it should preferably be the same), fix (Repair) the Pro installation, and still have the original product key and product Activation intact.
(if you don't know how to Repair an existing XP installation see this for one way of doing it:
What you should have done is get XP Pro, of the same version preferably (if all you could get is with SP2 and she didn't have that it will still work) not Home, and you would have been able to Repair you existing installation rather than install from scratch again, and not lose the existing installation. If the CD is the same version as she had, you could use the original product key and keep the product Activation intact.
If you chose to install from scratch with the new CD, you could just use the new Product Key.
But now you've got yourself in a fine mess.
Get yourself a free hard drive diagnostics utility from the website of the brand of hard drive you are having problems with. Test the hard drive - if it passes, continue these steps.
If not, you need to get another hard drive and do other things to recover what data you can that she thinks is essential from that drive.
What you should try, providing you have the disk space, is to start from scratch again with the XP Home CD, and install it to a directory OTHER THAN C:\Windows AND wherever the other installations are, say C:\Windows2
That should give you a normal clean install, but some of the programs in C:\Program Files will not work. Reinstall all the software you can to the new Windows directory (e.g. \Windows2), and many of the programs she originally had will work and still have at least some of the stuff she added to them still intact.
That should yield you a functioning Windows.
Delete any directory entries and their contents in C:\Program Files you don't have the CD's for to install again.
You can later clean up the other useless stuff through means other than Windows if you need to.
If you don't have enough room to install XP Home again, you'll have to delete some stuff to make room - anything that can be downloaded again, any directory entries and their contents in C:\Program Files you don't have the CD's for to install again, Temporary Internet Files, etc. etc.
You may have to do the latter with the drive connected e.g. as Slave, and another Drive as Master that has XP on it so it can see the NTFS formatting.