youre welcome,

thanks for postings replies to try to help me.

As a note of interest : I have repaired a few xp installations lately with the error of \system32\config\system file missing - i wonder if this is some kind of fault or bug. I have noticed it occur more frequently when they are booted into safe mode and then restarted. Also a couple of occasions when people have tried adding a new user account this message has also occured. I imagine the system file is part of the registry hive that handles user settings and is becoming unstable.
I have a surefire fix for this now - but chkdsk /r will usually do the job itself.

This is the standard Microsoft page on that error.

I just suppose since they put a page together that it is a fairly common occurrence.

http://support.microsoft.com/kb/307545/