I´m not sure this will work for everybody, but it did for me. As many folks posted, the solution indeed required re-flashing the BIOS, but the problem is how to do this if we cannot even get to the BIOS SETUP or booting Windows...
Well for me the trick that worked was to wait until the machine asked me to hit F1 to continue (which takes awhile since it first asks to press Fn-X), at this point, instead, I hit CTRL+ALT+DEL and surprisingly, the machine booted fine. I then DIDN´T go to SETUP, but I allowed Windows XP to boot and then I reflashed the BIOS.
Problem solved, like magic!!!
PS: The first time I tried to go to the BIOS SETUP, but the machine frozen, then, the second time I left Windows to boot straight using the same CTRL+ALT+DEL approach, so, my advice is: do not push your luck if you manage to boot like I describe above by trying to launch the BIOS SETUP utility, let Windows boot instead and re-flash your BIOS.
I Hope this works for everyone who gets a similar issue!
HoleyMoley, May 2012