Lost permissions

My friends computer suddenly lost all permissions, even while signed in as administrator. Is this a lost cause and do I have to reinstall Win XP on his computor?

 

This may or may not work, but try this:

Reboot into safe mode.
Then bring up the cmd prompt.
Type in:

reg delete hklm\software\policies\microsoft /f
secedit /configure /db reset /cfg "c:\windows\security\templates\setup security.inf" /overwrite
del c:\windows\system32\grouppolicy\machine\registry.pol

Then reboot back into normal mode.
This will delete any policies on the computer, and reset security on the entire computer. This may/will take some time to run.