Personally, id use the XP recovery console to try and fix the installation of Windows before even considering wiping it. Attempting to fix the MBR is the first and easiest thing to try, and then on the rest.
If the drive is failing, just do a raw backup from the hard drive on another system using Total Commander for fast transfers etc. Then try a chkdsk to see if it can fix any broken sectors etc.
It's unusual for a modern (last 7 years or so) system not to have SMART monitoring, so if your machine is relatively modern and you have not had any SMART messages at bootup warning you of imminent disk failiure, this is a good sign, though SMART cannot detect all problems or predict all failiures so it does not mean there isnt a hardware problem.
If you can get the system up and running to a useable state, you should download and use the free trial of a program called HDDLife which will monitor the drive using SMART and let you know if it is failing.
I realise you say you dont have much knowledge of computers, but if you know anyone who understands what they are doing, you should not lose much, if any, data and id hazard a wild guess its more likely to be a software issue rather than a drive failiure. Its at times like this when you realise how important regular backups are - i can't stress enough how important they are.
Apologies for not being able to offer any more advice or the steps to take etc, im posting on my phone atm. I hope you get it sorted and all is okay.