Stop 0xc2 bad pool caller error

[Karen]

I'm trying to boot up an AXUS L3400 Laptop but can't get
past a screen complaining about \WINDOWS\SYSTEM32
\CONFIGURE\SYSTEM, and to recover using the Recovery
Console.

I tried creating the XP bootup disks, and it allows me to
get through to the point where I select the directory to
recover from (C:Windows), and before it gets me to any
command line, I get the blue "Stop 0xC2 Bad_pool_caller"
screen - 0x000000C2 (0x00000043, 0x346A000, 0x00000000,
0x00000000)

I read that this error is generally associated with
hardware / drivers, but how can I rectifiy this since I
can't even seem to boot up, and how do i go about
isolating the hw / drivers?

Related:
1.I haven't used the laptop before, but the owner said it
was working fine all the while, and no new hardware or
software had been installed just before this problem
happened.

2.In creating the bootup disk, I tried both Chinese
Windows XP Home edition and XP Professional edition,
(downloaded from MS). Not sure how else to find out which
edition - the laptop had both Windows Home & Professional
stickers.

3.How can one enter fail safe mode, or get past the boot
up?