It's probably giving you a blue screen of death saying 'Inaccessible Boot Device'.

In their infinite wisdom, Microsoft thought it a great idea to have XP restart the computer instead of leaving these useful nuggets of information on the screen.

The above 'repair' option when booting from the computer from the XP CD should see you OK - all it'll do normally is check and fix any filing system errors that prevent Windows from finding files it needs to start. Choose to do the 'Fast Repair' when you get that far.