To add to Greg Palmer's concerns above:
. it worked fine for a while?
. it worked fine until you rebooted?
My guess is the latter case. It has to do with the System Restore/Diagnostic partition that is included as a Recovery means to become compliant with MSFT licensing.
Call the Tech Support at COMPAQ, as this is decidedly tricky. If you choose to use a Retail XP Pro installation, please advise back.