XP won't start, system32 file corrupted

Turn on my PC and instead of Win XP starting, a black screen with the following white words comes up...

Windows could not start because the following file is missing or corrupt: \WINDOWS\system32\config\system
You can attempt to repair this file by starting Windows Setup using the original Setup CD-ROM. Select "r" at the first screen to start repair.

Ok, my first issue:
I do not have a current backup (Yes I know BAD, BAD, BAD!! Just purchased an external harddrive but had not backed up yet...)
Second Issue: HP did not send the set-up cd, it's pre-loaded on the D drive (but can't get to it).

Before this happened:
pc had slowed down to a crawl!
Took forever to boot up; would hang up at shut down;
very slow launching programs, ex. Word.
Mozilla took so long to open or just would not open - used Opera browser instead, still very slow but could surf internet, email, etc.
Ran multiple Avast Anti-virus scans w/ no infections found. Automatic updates. Ran CCleaner for clean up. (Had not used registry cleaner feature real recently)
No new hardware or software had been recently installed.

QUESTIONS:
1. What to do first to save my files?
2. How to get my pc running correctly?

MY PC:
HP Pavilion a340n Desktop
2.60GHz Intel Pentium 4 Processor (w/ Hyper-Threading Technology)
512MB DDR SDRAM Memory
120GB Ultra DMA Hard Drive
Intel Extreme Graphics w/ up to 64MB shared video memory
CD-RW drive 48x24x48x max drive
DVD-ROM drive 16x speed

Thank you very much!!
Jennifer