System Missing Or Corrupted

[cypress_crow]

I've seen a few threads about this but I still haven't been able to fix it. I've tried booting up the computer from the Windows XP cd. Then followed the steps here: http://support.microsoft.com/?kbid=307545. But the computer can't find the file anywhere. So I exit and reboot, then I try again only this time I go to "Set up Windows XP, now Press Enter" instead of "To repair a Windows XP installation using Recovery Console, press R." I get a page that says:
"Windows XP Home Edition Setup
The following list shows the existing partitions and unpartitioned space on this computer.
Use the UP and DOWN ARROW keys to select an item in the list.
*To set up Windows XP on the selected item, press Enter.
*To create a partition in the unpartitioned space, press C.
*To delete the selected partition, press D.

152587 MD Disk 0 at Id 0 on bus 0 on atapi [MBR]
-: Partition 1 [FAT] 31 MB (24 MB free)
C: Partition 2 [NTFS] 149025 MB (124494 MB free)
F: Partition 3 [FAT32] 3530 MB (266 MB free)"

I don't know what to do so, I press F3 and exit. :( I don't want to have to reinstall Windows and lose everything..Isn't there another way? Please help a helpless n00b :(

[profdlp]

Don't use the Recovery Console; do a Repair Install instead.

Boot from the WinXP CD and let it run Setup as though you were doing a clean install. At some point it will detect the existing copy of Windows on the drive and offer you some choices. Pick "Repair current installtion" - NOT add a new copy, etc. After it's done, all your data should be right were you left it.

If it doesn't find the previous Windows install - stop right there and post back here with what it did find on the drive.

[cypress_crow]

I've never seen it ask about Repairing a current installation, um does that happen after I choose a Partition? And if so, which one should I choose?

--Edit--

I chose "To set up Windows XP on the selected item, press Enter." I tried it on each Partition. Partition 1 didn't have enough space. Partition 2 warned that installing Windows over the operating system currently on it might cause it to function improperly. Partition 3 said the same, I believe. I wasn't brave enough to chose to install it over Partition 2 because I wasn't sure it was the right thing to do. If I had, would it have given me the option to repair Windows?

--Edit2--
I didn't want to make a double post, so I'll just edit this one. My friend helped walk me through reformating and reinstalling windows. I had a feeling it would turn out that way. But thanks for your help anyway! :respect: