Bootup / Startup Issue on XP Pro SP2

Hi,

I'll 'try' and keep this quick:

A couple of days ago my computer, upon start/bootup, came up with the
message stating the the "ntoskrnl.exe file was missing or corrupted and
needed to be reloaded." Looking online (not ms.com) I was pointed to getting
this file from the WinXP CD (note. my version is XP Pro SP2) using the
'expand' command in DOS. I was unable to do this as I kept getting a message
that the file could not be created. Then, again looking elsewhere online for
more ideas, I tried doing a 'fixboot' in DOS hoping to repair the boot-up. As
you may know, this started to 'rebuild/create a new boot sector.' After a
while I finally got a message stating that the boot sector could not be
created. After that, when trying to reboot (w/ the Win XP CD installed),
things were different: after doing the initial memory count, the devices
search came up w/ NONE for the primary master drive and was correct for my
second physical HD. After a while, it finally did booted from the CD. I was
then hoping to reinstall Windows but ran into something else: in the Setup,
at the 'existing partitions and unpartitioned space' page, my list shows 8mb
(yes only 8mb) of unpartioned space and my options (at bottom of the screen)
are to install windows, create partition or exit. Note. at the top of this
list it states "114471mb disk 0 at Id 1 on bus 0 on atapi (MBR) - I don't
know what this means but do know that mbr is master boot record. Anyway, the
remaining 3 items on the list are drives C, D and E showing them as
partitioned w/ fat32.

NOW... my question - how should I proceed? What shoud/can I do with the
small (8mb) unparitioned space and what is it? Is it the 'unsuccessful boot
sector creation? Should I just install windows in the C drive again? I really
hope that someone has the patience to read through this and can provide
feedback.... please! Thanks, LA35.