The problem seems to be solved.
Apparently when I was installing the HP 1300 series software and drivers the XP Found New Hardware Wizard came on but the HP software installer would not let it finish and therefore XP has a hard time recognizing the new install fully and everytime XP boot
s up the "Found New Hardware Wizard" keeps trying to complete the install...

One HP support document that I read stated that some IBM or HP computers can have problems such as this. I uninstalled the IBMDLA software that came with the machine per a HP support document.

I uninstalled all remnants of the drivers and software and then re-installed a HP web download of the latest version of drivers and now my HP 1350 all-in-one unit is worker fine and I am not getting the Found New Hardware Wizard on every start up.