Yes you do have it you just didnt go far enough into the setup process to get it. It is not on the FIRST screen that comes up. You click Install Windows on that screen as pressing R will give you the Recovery Console. Then next screen after it scans your system will show you the R for the Repair setup.
If at this point you still dont see the R for Repair option, that is because the system does not find a Windows install and nothing you do at this point, including trying to replace just the hal.dll file, will work.
Since you think it said system.hal.dll i would say that my 2nd paragraph is more likely cause i have never heard of that system file. Unless you mean that it read as this:
C:\Windows\System32\System\Hal.dll is missing or corrupt
That would be much more closer to the normal hal.dll error.
Error message: "Windows could not start because of a computer disk hardware configuration problem"
In which case just a simple input of the XP CD, go to the Recovery Console and replace the file in question from the CD.
