I may well have caused this myself...but the fix is fairly common.
The registry gets corrupted through an uninstall and Windows cannot "see" the optical drives. Device Manager shows "exclaimations" and drive properties show "error 19" (registry corruption).
System Restore will not work because it finds that corruption and halts the restore on re-boot. (after re-think, it doesn't make sense that SR wouldn't work...it must be another issue!)
Here is what was necessary to restore XP's "mind" (and mine!)