It was the hard drive.
The hard drive was supposed to be new but I have my doubts. Took it to a local shop to have it tested and a test that was supposed to last 90 sec took 2 hrs.
With a new WD drive installed, I loaded XP (now comes with service pack 2) with no problems. One glich, It looks like I might have two task bars, one stacked on the other. Can't grab one and drag it from the other. Maybe the graphic is new and just includes a blue line framing the top of the taskbar?
Anyone else run into this?