Corrupt System file....Help please!

I have Toshiba Sattelite 5200 running on XP HE, SP2. Turned it on this morning and following message appeared on black screen.

"Windows\system32\config\ sytem file is corrupt or missing, sellect r after booting with recovery disk."

Unfortunatelly 3 Toshiba disks I have not doing anything.
They are:
1)Product recovery CD(2)
2)Tools and utilities CD

Product recovery CD giving me two choices.
a) reload windows(which I loose everything)
b) for expert use

I have no idea what to do?

Help would be more than appriciated.

Unfortunately, unless you can get to the Recovery Console you're probably going to have to reload Windows. If you can borrow a proper Windows XP CD, boot up with that in the drive and go to the Recovery Console (there won't be any problem with licensing issues just using the RC). Then this article explains what you need to do:

How to recover from a corrupted registry that prevents WinXP from starting