If I were you and if Im reading this correctly I would simply take my computer back to the compaq shop. As this is a preinstalled OEM version of XP and compaq are legally bound to provide a working O/S recovery disk with any computer sold. Is it still under warranty, or have you added any other hardware to the system since purchasing it. Does it lock up straight after reinstalling a fresh copy of your xp recovery, or only after adding updates etc..

let us know where it first starts getting a problem