Thanks so much for your time in assisting with this issue. I've been out of town for a while, but the computer seems to be still marginally hobbling along.
Otteppinno - thanks for answering my concern re would the computer try to boot from the USB drive if I managed to get a copy of Windows installed on it. I had suspected what you confirmed, but just didn't want to get the system even more messed up than it currently is if I attempted to do that.
Clive - the information you referred me to re installing Windows on an external drive was pretty interesting. Seemed a bit daunting initially and I'm going to save it to investigate at some point after pursuing what seems to be the smarter move of getting a working OS onto a regular internal drive, as you suggested. Curiosity kills cats, hopefully if I do experiment with installing onto my USB drive it won't kill my system too. I'll report back, either way. Thank you! Re using Paragon: I like their programs. I have a couple flavors of them with slightly higher than the free version capabilities, which they make available from time to time on GiveawayOfTheDay, and they should do the trick.
OtheHill -- I have no doubt that the drive is dying. SMART reports from different HD diagnostic/report programs agree there. I can't find my original Maxtor diagnostics disk that came with the HD (nine years ago!), and I vaguely remember using the currently available Seatools that Seagate now has available, which as I remember was a bit of a pain to use for some reason and turned out not to be very informative, so I'm just going to go ahead and replace the drive. As you, Clive, and LMiller suggest, a new internal drive will be living here shortly.
Wanderer -- thanks for the reminder about needing new drivers if I install to a new computer (or to a more modern OS than Win XP). Some of the Paragon programs have "adaptive restore" facilities that assist with installing to different machines, and that may ease the process.
So... it seems the most reasonable battle plan is just to keep reasonably up to date images of the disk on the USB drive until I get another internal HD, then reinstall Windows on the new HD and reinstall my programs and transfer the data files.
Being that my original Windows installation disk is from 2001, before even Service Pack 1, updating it to post-SP 3 condition seems like it might be a nightmare. Question: I believe Microsoft makes copies of XP available that are updated to SP 3. Would I just install that and use my original installation key from my 2001 copy of XP? Is that how that works?? If not, I'd might opt to just continue with an imaged copy of my current system, transferred to a new internal HD, even tho I'd still have a crippled Safe Mode, which makes me a bit uncomfortable.
Thank you ALL for taking the time to help me with this. On my own, I know just about enough to screw it up royally if I had just launched into this without some guidance from you all.
PS. This is a bit embarrassing, but I had a very hard time finding my way back to this post. Not clear to me if this is a different forum than the Tom's Hardware forum, or the same one, differently organized or something. Once I did find myself back here I had a difficult time navigating back to this post, basically found it almost by mistake. Is there a navigation help file or something similar out here anywhere??