after sp2 install can't boot - I'v tried many things

I am trying to repair a sp2 install error on my Desk top pc-

I installed with the microsoft sp2 disc and it would not boot

I now know I should have updated my bios and run windows critical updates

first- but my daughters iPod wouldn't update w/out sp2. (lame excuse I know-but she was melting down-lol)

So I have been trying to repair with the XP Pro Install disc

it freezes up after the Xp logo screen, while trying to use recovery console or second repair, it freezes up after first restart.

It also freezes up on the on the "Windows installation is restarting" screen.


if I don't clear the bios before each restart I get this blue screen error:
stop: 0x0000006f (0xc0000020,0x00000000,
0x00000000,0x00000000) SESSION3 INITIALIZATIO FAILED.

tried to go to Microsoft knowledge base, (it's their error after all) and was told that no such error existed for WinXP pro.

The old operating system was/is
XP pro sp1. It is a 2.6 ghz pentium4 stand alone basic comp.
AMI Bios, ECS Motherboard.

I have changed out the DDR ram for new ones
I have run disc diagnostics with ultimate boot.

Floppy drive doesn't work otherwise I would try Mill boot disc
"scanreg /restore"

I have tried a different hd with the XP install disc and came up with the same issues.

I even tried a hd w/ 98 on it and the 1st time it booted fine after that I got the blue screen error

Please advise me on what next to try. If I am very carefull I may be able to get to the recovery console, again. I have tried C:\prompt sp2 update and sp2 uninstall. (What microsoft help desk suggesed) I have been trying to fix this for over a week now.
My beautiful 16 yr. old daughter will be crushed if we loose all the info. on this disc.

Thanks in advance.
Kay