Have you try changing disk controller mode From IDE to AHCI, or vice versa from bios?

Forum ate my post:
Couldn't find that setting in the bios.
Unfortunately today is the beginning of a week vacation. Looks like I'll have to return to this.
Thanks for your help all.

Not a problem. If nothing else works just reinstall win xp.

Have a nice vacation !

Comment lines 603 + 604 (see pastebin - whatever line numbers that might be in your grub.cfg). If that's not enough, unplug whatever sdb is and retry with a fresh grub configuration (grub-mkconfig -o /boot/grub/grub.cfg).

edit: yes

I'll try it . sdb is a USB external harddrive.

Edit: no luck at all.

It wouldn't. Your MBR is fine as is your grub.cfg. You can safely ignore the "Unknown BootLoader on sda2" warning as nothing is attempting to boot from sda2, your extended partition. Though I'm curious if a NTFS partition used to start there. Anyway your boot problem happens after GRUB/Windows boot code reaches the NTFS partition.
The "Error loading operating system" is a XP specific error that commonly happens when the geometry of the NTFS partition is wrong. Which might have happened when one resized the partition. I didn't actually check, but I assume this is the case for you. Hex edit the correct values in or copy off all the files to sdb, delete the partition, recreate the partition, format the partition and copy the files back. Ideally do the recreate & format steps from Windows install/recovery media.

Could you explain what you mean by Hex edit? I have no idea what that is O_o or where I would do it.

Hex editing refers to editing binary data. It's typically done with a hex editor, displays values in hex instead of 1000111011100111. You would do it to your hard drive. Actually to the bytes in your NTFS partition on sda1. Of which I would copy to a file and work on said file.
You already said you have some backup of your Windows partition. Do you also have a backup of the Linux partitions with any data in them, have available downtime to completely reinstall Linux, definitively determined the problem is wrong geometry listed in the BPB/EBPB and know the correct values to change it to? Any of that is a no choose option #2. A simple misstep along the way and you overwrite your MBR, beginning of a partition or some actual data somewhere. Basically you want option #2 since you're asking.

Seems like a bad way of explaining it...

Hex editors let you edit binary data by using base 16 rather than base 10, which gives 4 bits per character. Also lets you edit logically between 00-ff rather than 0-255.

Looks something like this. If you use the old debug protocols it would look something like this :P

I don't really like to recommend it, but you could give testdisk a try and let it fix your partitions, but it could also screw everything up, so it's useless without proper backups.

Edit: nice step-by-step guide:
http://www.cgsecurity.org/wiki/TestDisk_Step_By_Step#NTFS_Boot_sector_recovery
... but instead of selecting backup boot sector, try rebuild boot sector.