When troubleshooting boot failures it can be helpful to understand a little bit what the boot sector is.
A boot sector is the first sector of your Hard Drive. It contains the information to locate the active partition and to invoke its Volume Boot Record.
Any computer with a mismatch in the boot sector will likely report "'Boot Sector Not Found".
The good news is that Windows XP keeps a backup of your boot sector, and we are going to try to restore it.
To repair the boot partition, boot the computer from your Windows XP CD-ROM and start the Recovery Console.
Next, use the Bootcfg.exe tool to rebuild the Boot.ini file.
In more details:
> Boot from the Windows XP CD ROM.
Insert the Windows XP CD and turn the computer on.
When prompted "Press Any Key to boot from CD", press a letter or number key.
If you don't see that Prompt, visit the Boot Sequence modification page
> At the welcome screen, press R for recovery.
> At the command Prompt type "bootcfg /rebuild".
That's it! Eject the CD, reboot and you are good to go.
Don't forget to also visit the Secure & Backup page to learn how you can prevent that from happening in the future.