I just recently noticed another user on this site asked a similar question about having a corrupt system file on bootup. The solution given was to run the diagnostics programs that came with the hard drive and also to run a memory/ram diagnostics (memtest-86 v3.0). I did both of these and still get the corrupt file error, so i think i might have a different problem. I just recently built my own computer using a 200gb western digital hd. As you may already know, XP does not have an easy time supporting hard drives over 137 gbs so i have to connect it with a IDE controller card (PCI). I was doing a bit of reading on this when i first started getting errors and noted that the transfer rate of PCI is slower than IDE which can cause some data errors. I was not aware of any solutions/patchs to fix this, however, after installing windows service pack 1 and updating the controller card's drivers, it seemed to transfer a lot smoother. I still keep getting errors in windows though to the effect of, "Corrupt system file: C:\$mft is corrupt or unreadable. Please run CHKDSK" So i run the chkdsk utility and it reads, "File record segment 31260 is unreadable, File record segment 31261 is unreadable" etc. This error comes up within a few hours of installing windows (which i have done over 8 times now). After a few minutes of showing the error the system begins running very very slowly and eventually locks up. My initial thoughts were that it has to do with the use of the IDE controller and in problems associated with a HD larger than 137 gbs. I was hoping some of you could help me out on this... THANK YOU VERY MUCH! -Paul you@senord.com

Have you tried running CHKDSK /R from the recovery console. It fixes the errors instead of just identifing them.

Boot from your Win XP CD then load Recovery Console (It's going to be a choice in the text mode blue screen). From then, you'll will log in a DOS like screen and you'll be ask for your administrator password (hope you have it!). At that point just type FIXMBR, it will then tell you it is corrupt and ask you if you want to fix it. Say yes and it will rewrite your MBR (MFT) to the default base installation. From then, you should be able to boot with no problem. DON'T do this if you have a dual-boot system (multiple OS).

Here is another recommended fix. http://support.microsoft.com/?kbid=176646