Hi,
In most cases a 'product recovery' CD/DVD will restore the computer to the original state when it was first purchased (the OS, Drivers, Applications). You will loose all personal data and applications that were installed after purchase.

how many HDD partitions do you have? if you have ample space left like at least 1.5(GB) of available space on the hard disk you can install another win xp home edition in a different partition not on the onew where the files are located ...after which access the files you need and back them up on your flash drive HTH ;)