Thank you for the suggestions. Now I can use my computer again after buying a new hard disk...
1) Sören, I have checked the BIOS, it always boots from HDD unless the F12 is pressed, which lets you to select the boot device manually.
2) saikee, my HDD was mounted on the first IDE socket and was the master device. So I tried root (hd0,0) and setup (hd0). It didn't work. It seems some important sectors were destroied by the previous mis-operations of GRUB. But probably not the MBR. Since I think I 'can' or 'have' fixed it by running WinXP's fixmbr and fixboot. The issue was the device are not recognizable by the BIOS booting procedure. Maybe that's why the Win98 installation CD can't find physic disk on the system, and WinXP installation hangs again(showing 'disk error, press anykey...') after first boot.
Today I bought another SATA HDD and installed a new copy of WinXP on it. The new HDD is the 2nd device so the drive C: is still my old HDD. But this time WinXP installation CD repaired the mysterious booting stuff on C:, on my old HDD. Now the ntldr and boot.ini work again.
Don't know what really happened, but finally I've got a new 160G SATA HDD. Not too bad
