I would take Phishhead's advice and try to install Windows server 2003 without upgrading from windows XP (you could even do a dual boot system). That should fix it. If not:


NTVDM:

The focal point of VM capability in Windows NT is NTVDM.EXE from the SYSTEM32 directory. Each running instance of NTVDM.EXE constitutes a separate VM. NTVDM.EXE is a Win32® program. However, it uses its separate address space to create a VM that runs alongside regular Win32 processes. In other words, programs for MS-DOS and 16-bit Windows are like children belonging to the adult NTVDM process. NTVDM is just another adult Win32 process, with essentially the same rights and privileges as any other Win32-based program. This architecture even has its own name, Windows On Windows (WOW).

You either have the incorrect version of windows server 2003, or a corrupt disk. Make sure you are using the correct version for your processor or that your current installation disk is not corrupted.