Inspiron 6000 with Windows XP profession not booting, blue dump screen with 0x00000024 and ntfs.sys

We have Dell Inspiron 6000 laptop with Windows XP professional. When we start the machine we are getting blue dump screen with following message.
STOP: 0x00000024
ntfs.sys
 
We ran Diagnostic using key F12 at boot. All tests ran successfully and passed
 
Following tests are checked.
Express
Extended
Custom
Symptom Tree including Windows blue screen
All tests passed successfully.
 
We also removed the ram and put it back to check if ram has any effect. However, we get same dump screen.

We tried booting the machine in all three types of safe mode and also normal windows, but get the same dump screen.
 
After all these tests it seems that it is XP installation issue.
Dell has provided us with XP installation CD. We changed the boot sequence as CDROM first and then Hard disk so that machine can boot from CD.
 
When any key is pressed to start the boot from CD, the message is received 'Setup is loading the files'. It takes few minutes. Then we get three options
To set up windows now press Enter
To repair a Windows XP installation using Recovery Console, press R.
To quit Setup without installing Windows XP, press F3.
 
We first tried to repair by pressing "R". However, we get same blue screen with same stop code and ntfs.sys message.

In next attempt we pressed "Enter" to set up windows. However this time also same blue screen with same stop code and ntfs.sys message appears.

We have taken back up of the data and do not mind if the machine needs to be formatted.
 
What should we do next? Any help would be appreciated.

Thanks

Hema