Windows XP SP2 and SP3 BSOD Issues

We had an issue with a PC in which we had an error NTLDR Can Not Read BOOT.INI. We performed a Windows Repair using the original disc for the PC which was XP Home SP1. It booted fine except for errors stating that it required SP2 or higher to run certain apps. We tried to upgrade to SP3. After installation it rebooted to flash a BSOD for a split second and reboot. After reboot it would only boot in Safe Mode. We reverted back to SP1 and tried to reboot. Everything was okay again. We then tried to install SP2 and the same thing happened as it did with SP3. The machine will only boot with SP1 on it now. Any ideas?

 

I would wipe the drive and start over. Is the drive good?

 

Is this a proprietary PC such as HP/Compaq and etc.? If so check the manufacturer's website for a required download for that machine to be able to install SP2 or SP3.