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If you start Microsoft Windows XP Setup from the 16-bit Winnt.exe file, when Setup exits and the computer restarts, Setup restarts in an endless loop.
This issue can occur if you did not click I agree in the End User License Agreement (EULA). If you do not click I agree in the EULA, Setup is aborted, and then Winnt.exe does not properly clean up its temporary files and boot sector.
To resolve this issue, restore the computer to its previous configuration:
For Windows 95, Windows 98, Windows 98 Second Edition, and Windows Millennium Edition (Me):
Start the computer from a startup disk that was created in the previous operating system.
Type sys c: to restore the boot sector to its previous configuration.
Remove the boot floppy and restart the computer.
Delete the C:\$win_nt$.~bt folder.
Delete the C:\$win_nt$.~ls folder.
For Windows 2000 and Windows NT 4.0:
Start the computer.
After the BIOS completes the power-on self test (POST), the Boot.ini file is displayed briefly (the timeout is set to one second, so careful attention is required).
As soon as the BIOS completes, press the UP ARROW key repeatedly in quick succession to stop the timeout for the boot menu.
When the boot menu is displayed, click your previous operating system (it should be the top entry in the list).
After the computer has restarted in your previous operating system, remove the Read-Only attribute from the C:\Boot.ini file.
Using a text editor such as Microsoft Notepad, open C:\Boot.ini, and then remove the following line:
c:\$win_nt$.~bt\bootsect.dat="Windows XP Installation/Upgrade"