Plug & play fails, can't install printer. Could Partition Magic by responsible?

Hi, all,
I bought a slightly used laptop which is running XP Home and was already split into 3 drives with Partition Magic when I got it. Overall the computer seems to be running fine, except the install for my HP Multifunction printer keeps failing. During the hardware check, it says plug and play failed and exits.

My thoughts are:
1) Could the failure have anything to do with the partitioning?
2) Should I do an OS repair? And can I do it from an XP Home "upgrade" CD?
3) Can/should I upgrade to XP Pro over XP Home, because the XP Home disk doesn't belong to me?

Background info:
I used this same CD to install on my other 3 XP Pro computers without a problem.

It's on a wired LAN, and I have successfully used the windows add printer wizard to create an IP port and print to it. Only problem is I had to use a default driver so it only prints black & white, no color. HP tech support says I can't just install the right driver using the add printer wizard because it is a multi-function printer.

HP support can't seem to help me. Have been on chat with them for hours already. Did virus check, etc.

Suspect Partition Magic because: I had an earlier problem with an "Autocheck skipped" message on bootup. Was able to fix that with a utility from Symantec that deletes obsolete registry entries related to Partition Magic.

Borrowed an XP Home upgrade CD from a friend. When I put that in, my only choices were either Upgrade or Install New, and I expected to see "Repair" option. So I got scared and quit.

Any recommendations?
Thank you in advance!

 

Have you checked if the plug and play service is running

run > services.msc


turn on all services just to check


also in your (Edit by mod - BIOS) turn OFF "use plug and play OS "

 

Yes, thank you, I did check plug & play

Sorry I forgot to mention it.
In the meantime, I thought of a way around: I plugged the printer in directly via USB, and it installed itself! Then I just changed to printer properties to assign the IP port instead of the USB port. That worked fine.

But there is still something seriously wrong with the system, because when I rebooted it (heady with printer success!) it kept hanging up.

I tried booting into safe mode with F8, but that didn't work. So I ran msconfig and set it for safe mode. MISTAKE!!!!!!! Computer wouldn't boot at all!!!

Tried inserting Windows CD to repair OS; still didn't work.
Finally, I thought to install ANOTHER copy of Windows on Drive E:
This worked fine. Now I have access to all my files, and the new OS seems to run fine from E. But of course, all my registry entries are gone and programs won't run.

I ran virus scan on the C drive, killed all viruses, and tried rebooting from C, but alas computer still runs very slow and soon hangs.

Tried booting from CD and repairing C:\windows now (having already edited boot.ini to remove the safe mode setting).

But it asks for an administrator password! This has happened to me before. There IS no administrator password. If I just hit return, I get to the C:\windows prompt and nothing more.

Does anybody know how to repair the OS from the CD?