Tried installing xp on imac 17" today. I keep getting the hal.ddl file is corrupt or missing. Tried the Microsoft fix instructions and it doesn't seem to matter if i do NTFS Quick or full or FAT32 partitions.
When I got that error on a Windows desktop after installing a new hard drive I found the answer at http://pcsupport.about.com/od/pcrepair/a/missinghal_dll.htm. As it turns out it was the boot.ini file that was corrupt, not the hal.dll... Following the instructions, rebuilding the boot.ini file was a breeze. I hope this helps.
MvS