It might also be worth noting that when the PC goes to a black screen before the blue screen it gives me two selections of Windows Media Edition XP. If I select the top one it goes to the start windows in safe mode selection screen but if I select the bottom one it brings me to a screen which says
This suggests that there is two operating systems installed on the HDD.
Did you try Last Known Good Configuration on both options.
Can I ask what type of XP disk it is that you have as in a full retail type, an OEM Dell etc type, a system restore disk that you have created yourself or a burned copy.
As an asides can I ask that if you have something to add while waiting for a reply that you use the edit tab – bottom right of the dialog input box, this will ensure that nothing gets overlooked (this can happen if your previous reply was on a different page)