Help, big problems with laptop

I have a toshiba satellite 1805-s253 pentium III and windows ME
its been a great tool and hasn't given me any problems, untill now.
I started it one morning and it wouldn't load anything, explorer, windows, nothing.. it just showed the backround and wouldn't respond to any imputs.
so I ran the recovery disk while it was running it said errors occured, then it started with a screen that says

"1. normal
2. Logged (bootlog.txt)
3. safe mode
4. step-by-step
after entering a choice it says
warning: windows has detected a registry/ configuration error.
Use SCANREG to correct this error."

then it says

"the folllowing file is missing or corrupted C:\windows\system\vmm32.vxd
type the name of the windows loader (eg c;\windows\system\vmm32.vxd)
C>_"

typing in the windows\system\vmm32.vxd does nothing but bring that same thing up over and over
I don't know alot about computer, I use the computer for work (Volkswagen tech) and really need my computer back (I use it for programs like VESIS and Vag-Com)
thanks.
and this is a great site!