xp from hell

My friend has just freshly installed dual boot 98se and xp and after couple days it restarted and says cant find HAL.dll file in sys.32 folder
when we get into the drives the partition where xp was is now showing full but when we explore it its empty, no hidden files, just nothing
its formatted fat32 on all
his just installed 160gig seagate drive and a seagate 80gig drive
he can not get xp to run its as if its gone, the whole partition
any ideas
thanks
 
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