thanks Simpswr for you continued interest!
All of my partition information was being read directly from the early stages of the win xp install process.
Just spent another full day on this after giving up yesterday on the the original harddrive. I treated the machine to a new SATA 160Gb drive and had another pile of unexpainable problem when xp install process kept (in several diffent ways) saying it failed to format the new 20Gb partition I'd created on it. But 4th time around format finished ok and instalationl began - and finished succesfully...with the initial display resolution at 640x480, 4 bit depth I immediately installed the Matrox drivers for the Millenium G450 graphics card. This called for a re-boot. On rebooting the original problem had returned.
ie Window spalsh screen appears for a few seconds, then goes black for a while, then system reboots .Then "widows failed to load successfully" message/options. Only safe mode works.
So I pulled out every card in the machine except graphics. Exactly the same. So I disabled the graphics card - and it was ok! I've tried 5 different versions of the Matrox drivers including the latest from a few weeks ago and the last certified driver dated 29th July 2006...but to no avail. With the Microsoft drivers (dated 2001) it always works, but with Matrox it doesn't.
This graphics card dates back to about 2001 and has been in use on this video editing pc ever since..including thru a complete rebuild last year when I changed to the Winfast K8S 755a, AMD motherboard with windows XP home SP1a. It doesn't connect to the internet much so hadn't had many updates until I applied the SP2 last week. maybe the only solution is to get another graphics card?