Place your Windows XP cd in tray. Restart PC and you should get a message to Press any key to boot from CD rom. Choose the option for Recovery Console. When it asks you which Windows installation choose the number 1 and press return. Then follow these instructions:
Once at the command prompt, type in the following commands:

cd c:\windows\system32
copy "..\driver cache\i386\ntoskrnl.exe"

If prompted to overwite the existing file, type y and enter.
If you receive a file not found error, make sure that the path in the copy command is correct. If it is correct and you still receive the error, then try the following commands:

cd "c:\windows\driver cache\i386"
expand sp1.cab -F:ntoskrnl.exe c:\windows\system32

Again, if you are prompted to overwrite the file, type y and then enter.
Also, if your OS is installed on a partition/drive other than C:, then replace any occurance of C: with the correct letter. (D: for example).
Replace any occurence of 'windows' with what is appropriate for your system. (winnt for example)
Reboot. Your system should start up normally