What other Drive monitoring, recovery, or checking software might you be running?
Can you open Disk Management, or Defragmenter, in Computer Management, (right-click My Computer, select Manage)?
What is the exact error message?
Have you tried Safe Mode? Or even as a different Administrative user in Normal Mode?
M$ Defragmenter Does Not Run
thread779-1354393
Some general things to try.
See if System Restore will get you back to a restore point before your problem with Explorer.
Try running ChkDsk to check your drive for errors. Right-click your Drive icon/ Properties/ Tools/ Error Checking. Select both boxes.
Run the System File Checker program from the Run Box by typing.....Sfc /Scannow in it and have your XP CD handy.
HOW TO: Verify Unsigned Device Drivers in Windows XP
If they don't work you could try repairing windows by running it over itself. You will lose all your windows updates but your files will be untouched.
How to Perform an In-Place Upgrade (Reinstallation) of Windows XP (Q315341)