After much Google searching for advice, booting XP in Safe-Mode and trying Restore Points (as far back as a month), nothing let XP boot up completely (just the moving blue squares).
We were then forced to reinstall XP afresh. This, of course, knocked out the dual-boot menu we had before. Microsoft warned us about this “Install the older OS first, then the later one”. Well, Windows 7 worked perfectly, so we weren’t about to reinstall that — just XP.
We tried downloading EasyBCD (which we were assured runs on XP) to construct a boot menu. Unfortunately, with a newly installed XP, it did not have any Service Packs installed. EasyBCD used the .NET Framework which, of course, failed to install. This left XP in a strange state (not recognizing USB memory sticks), although after initial XP installation they were recognized correctly.
We then booted from the Windows 7 Installation disc and reconstructed the boot menu.
We may now have to reinstall XP to get it back on its feet.