That is such a popular problem with HP computers that they wrote an article about it (that means it happens a lot):
http://h10025.www1.hp.com/ewfrf/wc/document?lc=en&dlc=en&cc=us&docname=c01872275
Compressing is not a big mistake, but in todays world where disk storage is cheap it is usually not worth it - you just buy more storage or do dome disk maintenance (remove things). Compressing can actually slow down your system performance too. I think it is just some kind of leftover from the old days and can have negative consequences today.
Using the HP article, you can fix your system in a few seconds after getting into the Recovery Console.
There is a similar problem with non HP systems where the ntldr file can get compressed and resolving it is a little different, but the concept is the same and just takes a few seconds to fix.
You will not be booting into any kind of Safe Mode either.
Getting into the Recovery Console could be the biggest challenge.
Do you have a genuine bootable XP installation CD? This is not the same as any System Recovery type CDs that may have come with your system. If you don't have one, you will have to make a bootable Recovery Console CD using a working system - or physically move your HDD to a working system, fix it and put it back.
Does your system of unspecified model number have a working CD drive?
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