When you reinstall Windows, you WILL NOT loose any of your other files and/or folders. Think of it as installing just another application.
You are only reinstalling the OS, NOT formatting your drive.
You say you don't have any users set up on your computer, but you really do. First off, you have the standard guest accound and the standard administrator account. These are created when windows installs. The guest account is disabled by default and the administrator account is only accessble in Safe Mode.
There is a third user, however, that you created when you set up windows. If you only have one user on your system, Windows bypasses the login screen and takes you right to the desktop. Since you haven't actually had to log into the account, you may have forgotten that you created it.
With that in mind, when you get to the "Add User" screen of windows setup, pick a user name that is really wild like "hairbrush" or something similar. You want to pick a name that you know for sure you didn't use before.
When user "hairbrush" gets to the desktop, look at your users under the control panel. There, you will see the old user you had created. Reboot, log in as the old user and delete user "hairbrush" from the users under the control panel.
REINSTALLING WINDOWS WILL NOT DELETE ANY OF YOUR OLD FILES AND/OR FOLDERS.
Be sure, however, that you tell it to REINSTALL windows into the SAME DIRECTORY as the corrupt version. If you install to a new directory, your system will give you a message as though you have a dual boot system. It will ask you which XP HOME version you wish to load. One, of course, will not run as it still has the lsass.exe problem. The other will run, but you'll loose all of your old settings - background, shortcuts, program shortcuts on the start menu, etc. In addition, you'll have to activate your copy of windows again.
If you happen to dot his, you can easily correct this problem by editing the boot.ini file. In that file, just find the references to the two XP HOME's you have installed. Delete the line that refrences the corrupt version. When you reboot, since only one OS is listed (the working version of XP Home), windows will load without asking you select an OS from the multiboot screen.
If you install into the same directory, you can get back your old user and life will resume for you as if nothing ever happened.
When you tell windows to Install from the DOS screen, make sure you pick the REINSTALL option. Don't let windows format your drive. You'll be OK. You'll see what I'm talking about when you get to that screen.
Keep us posted.