Windows will not start-corrupt file

When i boot my omputer up i get the following message:
Windows could not start because the following file is missing or corrupt:
\WINDOWS\SYSTEM32\CONFIG\SYSTEM

You can attempt to repair this file by starting windows setup
using the original CD-ROM. Select "R" at the first screen to start repair




I did this, and it said bad diretory or something, i need help bad....

 

I did this now i get the blue screen STOP error...

 

Thanks for the first response, Tim. Very educational.

 

I had this same message:
"Windows could not start because the following file is missing or corrupt: \WINDOWS\SYSTEM32\CONFIG\SYSTEM
You can attempt to repair this file by starting Windows Setup using the orginal Setup CD-ROM. Select 'r' at the first screen to start repair."

It would not read the disc. Another friend did use 'F2' to at least get back to where he could reset the computer, but it would only go back to the 'out-of-the-box' status. I lost all docs, pics and music, but the computer works.

What program does Maj. Geeks offer that may recover my lost info.??

Thanks, mcc