Sounds like it needs doing again from scratch and then patching using the windows update site....it'll find tens of updates and drivers for everything and it's just a matter of sitting there and letting it get on with it, rebooting, going back to the site and carry on like that until it's all done.
Unless of course the original message was correct and then it's trouble....there are domestic progs that will analyse and sometimes correct HD errors (by ignoring the bad sectors and effectively pretending they don't exist) or she could pay serious money to get the data retrieved which may or may not be possible.
Do you know what make/type of HD it is ? (Seagate and various others do their own progs to analyse them)
Personally (and this may not be right but it's what I'd do if I was sitting in front of that nmachine) I'd try re-installing from the XP disc from fresh and see what happens, then go through the update and patching procedures.
If that did't work, I'd try the HDprogs to see if it could be fixed but TBH it's more likely that a new HD would be the easier route from there.......new HD's are bloody cheap now and you could then set the old one (that sounds like it may be corrupt) as a slave and see if you could extract any info from it after installing that copy of windows on the new HD.
HTH