Setting up a fresh OS would be the best idea but I don't want to lose any important files..
witch file are you talking about ? If you are talking about that you kept your document files in c drive then.
set up a fresh windows 7 . If you select the drive where the previous os was running on then windows 7 will move your privious files to folder named privious windows or something like that. But if you set up xp on that drive then xp will format that drive and then start its setup . In witch case you will loose your files. And i dont know about othe windows os
But you can set up XP in another drive .
And if your talking about, you dont want to loose your installed programs on that privious os, then seting up a new os in the same drive isnt an option.
Set up xp in another drive like D or E and copy those programs from C drive then use batch scripting or use portable suits to portablize your programs. I heard portable apps maker is very good for this.
And try restoring your bios settings to default . I had problem with boot failure witch caused blocking the boot access to any drive. And win 7 couldn select any drive to set itself up. This could be a reason why any utility cant restore your privious OS.