Please help!

I am working on a friend's computer.  She had a power interuption, and now it seems the system will not boot up.  She gets an error saying,

"Windows cannot load because of a software error,"

Then it says the problem code is to "load needed DLLs for kernel"

When I try to repair using an XP disc, it says it cannot find the previous version of Windows XP.  I have never seen a hard drive get completely wiped out due to a power interuption before.  There are no viruses present, this copmuter was currently not even connected to the internet.

Please help me be the hero.  There are many pictures and keep sakes she had on there that she is completely depressed about losing.

Any ideas will be appreciated.  Do you think slaving that hard drive off another computer that boots up successfully will help, and I can transfer the files to another computer?

Showstoppa.