Try starting in safe mode without networking. Not sure if that worked with XP or W7.
Computer should start then there is a way of removing the constant privacy warning but you would have to google for that.
Cheapest way would be to buy a keycode from E-bay they are not expensive and maybe trying that. Of course if Microsoft give you a free keycode that would be the way to go.
There is an 0800 number for microsoft Uk but unfortunately I do not know what it is.
Don't buy a keycode from microsoft as it will cost about £130 from them