|Apparently, you can only create a "Windows Automated Recovery Disk" if you have XP Pro .|
Is that what you have ?
The floppy disk may have had previously undetected bad sectors on it. That's also a common problem.
I recommend you have Windows check the floppy disk whenever you're going to be using it for anything essential or important, and that you make at least one copy of the resulting floppy or the data on it after it has had data copied to it or placed on it.
The best, most reliable way to have Windows check the floppy for previously undetected bad sectors is to do a Full format of the floppy, which automatically checks for bad sectors as it's formatting.
Insert the floppy in the drive, RIGHT click on the A drive letter in My Computer or Windows Explorer, select Format, DO NOT select Quick format, Format the floppy.
When it has finished, RIGHT click on the A drive letter, select Properties.
The Capacity should be the full 1,457,664 bytes, NO bytes in bad sectors should be listed.
If ANY bytes in bad sectors are listed, DO NOT use the floppy for anything important - it will probably spontaneously develop more bad sectors as time goes by. Start over and Full format another floppy, etc..
As far as I know you should have no problem making a "Windows Automated Recovery Disk" with a non-defective floppy disk at any time, but on the other hand I have only fiddled with my own and other's systems that have XP Home or MCE versions on them, not Pro.