system32 folder empty

I have problems with my pc for a few weeks now.
I have Windows XP SP2 and Mandrake 10.0. The problems are of course with the XP, the Linux installation is 3 months old already and with no problems yet.
The first symptoms were that the system was loading slower and slower. Then one day started rebooting. I reinstalled XP and it was working fine for a couple of days then problems reappear exactly as before. Last time i was thinking maybe it's a boot virus, so i booted from a Win 98 cd and run fdisk/mbr to clean that up. After that i reinstalled again XP, with the network cable unplugged, and reinstalled the lilo bootloader. All was ok until today, when i booted in xp it said that it cannot find windows/system32/config/system. i booted in Linux and the windows/system32 folder was completely empty.
I have Trend Micro Internet Security 2005 installed, so the antivir and firewall seemed ok.
I cannot run any of the software you mentioned in the stickyes until i reinstall again XP.