It looks like either IE or XP itself is damaged, read the following thread to see if it will solve your problem.
http://www.experts-exchange.com/Operating_Systems/WinXP/Q_20655616.html
Let me know if it helps.
One more thing, if you wan to go ahead fix IE yourself, you can read the following article
at Microsoft website:
http://www.experts-exchange.com/Operating_Systems/WinXP/Q_20655616.html
This article contains detailed information of repairing or reinstalling IE.