Thanks for the help Schtrom, Redline99, and sosotit; I finally got this enigma working.
Here is a lengthy description on my procedure.
I hooked up a backup harddrive (reformatted with only xp and sp2) to the exact same hardware config that wasn't working. I transferred Schtrom's and Redline99's programs over to this drive and I still encountered the same errors so I figured it was a hardware problem with my onboard IDE controller.
1)I went out and got a USB to PATA connection to test this as well as a PCI Ultra ATA card. I tested the USB first and lo and behold it worked in the clean enviroment!
2)Then I swapped back to my old hdd system and used the PATA connection and it did not work again however I encountered slightly different errors.....this shows it was not only a hardware but a software issue.
3)I started disabling programs and uninstalling unnecessary programs. I disabled/uninstalled the Windows Genuine Notification through the system32 folder and once this was disabled everything worked!
4)So I disconnected the USB to PATA and hooked up directly to my Mobo to test my onboard IDE controller again and it still worked perfectly...
Still not sure what the culprit was because two different environments with different variables reacted in different ways but the problem is solved.
